BVI Finance recently provided an update in relation to the current positon in relation to the Economic Substance Legislation. The key points to come out of the update, in summary, are as follows:
- The Rules (and Explanatory Notes) will be issued by the ITA on 30th September 2019.
- The official reporting portal is currently being developed to allow collection of the prescribed substance information. It is not currently possible to upload the substance information as required by the legislation.
- AMS will offer a structured reporting tool to ensure that each company in scope will be able to comply with these regulatory demands.
Update on the Economic Substance Code and Guidance Notes
The Economic Substance (Companies and Limited Partnerships) Act, 2018 (the “Act”) gives the BVI International Tax Authority (“ITA”), the power to issue rules on how the economic substance requirements may be met, including rules on the interpretation of any expression used in the Act or in regulations.
As a result of this, the draft Code is being redrafted in the form of Rules and will be accompanied by Explanatory Notes. The content of the Rules will remain substantially the same as the draft Code previously issued.
The Rules (and Explanatory Notes) will be issued by the ITA on 30th September 2019. We will provide a further update once they are issued.
Clients are reminded that entities subject to the Economic Substance Legislation must be able to demonstrate economic substance in the British Virgin Islands for the current financial year (2019) and each subsequent financial year; however, no reporting is required until the latter half of 2020.
BOSS Legislation and Reporting Portal
Amendments to the Beneficial Ownership Secure Search System Act, 2017 have been passed and include matters related to economic substance.
The reporting portal which is being developed to allow collection of the prescribed substance information remains unavailable and, as such, it is not currently possible to upload the substance information as required by the legislation. We will continue to keep you updated as to when it is likely to be available. We are hopeful we will have a clear understanding of all the information that is required to be uploaded in the near future.
AMS Group – Economic Substance Solutions
The AMS Financial Group has a dedicated team who can provide assistance and solutions in relation to all aspects of the economic substance requirements. These can be tailored to the requirements of each company or relevant entity and range from an initial classification check to a full review, legal advice and where necessary, full substance solutions, including the provision of directors, office space and employees.