BVI Version 2 of Rules on Economic Substance

 In British Virgin Islands

On 10 February 2020, BVI ITA published version 2 of Rules on Economic Substance. The revision can be downloaded by clicking the link below:-

Following is the summary of the changes to the rule for your easy reference:-

  • the anticipated duration of compliance plans have been clarified in paragraph 2.12;
  • the procedure to file tax residency claims have been clarified in a new paragraph 4.3;
  • the reference to ‘general partner’ has been corrected in paragraph 5.26;
  • paragraphs 5.28 and a related sentence in 2.7 have been deleted (we understand as possibly ambiguous);
  • clarification and examples of IP holding business were added to paragraphs 5.31 and 5.32;
  • clarification and an example of distribution and service centre business were added to paragraph 5.36;
  • where strategic decisions are to be taken has been clarified in paragraph 7.4;
  • where core income generating activities are to be performed have been clarified in paragraph 7.19;
  • clarifications on outsourcing were added to paragraph 7.22 and 7.23;
  • paragraph 8.2 has been shortened;
  • the summary on the applicability of the Rules have been set out more clearly in paragraph 11.10

If you have further queries, please do not hesitate to contact you Keyway Representative.