The [British] Virgin Islands has now been recognised as a fully compliant jurisdiction for tax purposes under the European Union (EU), having previously been placed on "Annexe ll" of the EU's list while they monitored the Territory’s compliance in matters related to economic substance. Photo: VINO

Premier Andrew A. Fahie says his administration welcomes the announcement & will remain focused on the success of the VI's business & financial services sector. Photo: VINO/File

While the Territory was never added to the EU’s list of non-cooperative jurisdictions, getting placed on Annexe ll, meant it had to meet EU economic substance requirements. Photo: Internet Source

The announcement was made in a press release entitled 'Taxation: Council revises its EU list of non-cooperative jurisdictions,' published by the Council of the European Union on Tuesday, February 18, 2020.

“I welcome the European Union’s recognition that the BVI fully complies with its tax good governance principles. This is as a result of close cooperation and positive dialogue with the EU and demonstrates the BVI’s commitment to meeting and surpassing international standards," Hon Fahie said in statements released late Tuesday afternoon.

VI had to meet EU Requirements 

While the Territory was never added to the EU’s list of non-cooperative jurisdictions, getting placed on Annexe ll, meant it had to meet EU economic substance requirements first by passing the Economic Substance (Companies and Limited Partnerships) Act in December of 2018.

"The BVI was also required to undertake further work to define appropriate substance requirements for collective investment vehicles. Following a thorough process of assessment, monitoring and dialogue, the EU now deems the BVI to be fully compliant with its EU tax good governance principles and the jurisdiction has been removed from Annexe ll," a statement from Government said. 

While the VI is now a compliant jurisdiction; however, the EU announced that four other jurisdictions, including fellow Overseas Territory (OT), Cayman Islands, along with Palau, Panama and Seychelles, is now on its list of non-cooperative tax jurisdictions.

According to the EU, those jurisdictions did not implement the tax reforms to which they had committed, by an agreed deadline.

Gov't will remain focused - Premier Fahie 

According to Premier Fahie, in order to keep the VI in good standing, “I, along with my Government, remain completely focused on ensuring the continued success of our international business and finance centre and its role in the global economy."

He said the belief is that there will be significant opportunities for the VI and its people to enhance economic substance even further.