BVI and Online Submission for FATCA, CRS and CbC ReportsLeave a Comment
BVI and Online Submission for FATCA, CRS and CbC Reports – Introduction
The BVI has made a significant stride towards enhancing transparency and tax information exchange.
It has mandated that, from 24 January 2024, all entities under its jurisdiction with certain financial reporting responsibilities, are to submit their reports exclusively through the BVI Financial Accounting Reporting System (BVIFARS).
The relevant reporting responsibilities include:
- US Foreign Account Tax Compliance Act (FATCA),
- the OECD Common Reporting Standard (CRS), and
- the OECD country-by-country (CbC) reporting rules
Background and Impetus for Change
The shift to the digital platform is in response to the recommendations from the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum).
Despite BVI’s AEOI legislation aligning with the Global Forum’s technical standards for years, the OECD’s 2022 review identified significant gaps in the actual AEOI implementation.
The spotlight was on the “significant issues” concerning the assurance that Reporting Financial Institutions were accurately carrying out due diligence and reporting procedures.
The Global Forum hence called for the BVI to fortify its domestic compliance framework to solidify CRS implementation effectiveness.
Challenges and Proactive Measures by the BVI Government
The BVI government candidly attributed the shortcomings to the devastating impact of Hurricanes Irma and Maria and the subsequent global COVID-19 pandemic, which significantly hindered their information exchange capabilities.
In light of these challenges, the government requested a supplementary review to validate the improvements in their AEOI processes.
This request was approved, with an on-site visit by the OECD slated for the first quarter of 2024 to confirm the BVI’s adherence to the stipulated conditions.
Operational Details of the BVIFARS Portal
With the activation of BVIFARS in January 2024, entities are now transitioning to this centralized online system for their FATCA, CRS, and CbC report submissions.
A notable feature of this new system is the imposition of an annual usage fee of USD185 for each reporting entity, payable by 1 June each year.
Key Deadlines and Compliance Requirements
Entities are required to be vigilant about the following critical deadlines:
- The enrollment deadline for US FATCA reporting is set for 1 April 2024.
- The enrollment and notification deadline for CRS reporting falls on 30 April 2024.
- The final date for submitting annual reports for both FATCA and CRS is 31 May 2024.
Additionally, each legal entity is obligated to furnish its registered agent with the mandated economic substance information annually.
The registered agent, in turn, must relay this data to the BVI International Tax Authority within six months from the end of the pertinent reporting period.
BVI and Online Submission for FATCA, CRS and CbC Reports – Conclusion
This transformation in the reporting process for BVI entities signifies a proactive approach to addressing the challenges previously flagged by the OECD.
By embracing a digital and centralized reporting system, the BVI is taking definitive steps towards bolstering its compliance framework, thereby reinforcing its commitment to international tax transparency and cooperation.
If you have any queries on this article about BVI and Online Submission for FATCA, CRS and CbC Reports, or BVI matters in general, then please get in touch.