Offshore Services – British Virgin Islands
The Tax Information Exchange Agreement (TIEA) between Japan and the British Virgin Islands came into effect on October 11 2014.
Authority and scope
The BVI-Japan TIEA is essentially consistent with the Organisation for Economic Cooperation and Development standard model template for TIEAs. It provides for assistance through exchange of information that is foreseeably relevant to the administration or enforcement of the laws of the British Virgin Islands and Japan concerning taxes covered by the TIEA. In the case of the British Virgin Islands, the competent authority is the financial secretary or an authority designated by him in writing (eg, the International Tax Authority); the competent authority in the case of Japan is the minister of finance or his authorised representative. The BVI-Japan TIEA applies to taxes of every kind and description imposed by the British Virgin Islands and Japan, except those imposed on behalf of political subdivisions or local authorities.
The requesting party under the TIEA must provide information on:
the identity of the person that is the subject of the request;
the period of time with respect to which the information requested is required;
the nature of the information requested and the form in which the requesting party would prefer to receive the information;
the tax purposes for which the information requested is sought and the reason for believing that the information requested is relevant to the administration or enforcement of the laws of the requesting party;
reasonable grounds for believing that the information requested is held by the requested party, or is in the possession or control of a person that is within the territorial jurisdiction of the requested party; and
to the extent known, the name and address of any person believed to be in possession or control of the information requested.
Further, the requesting party must provide a statement that:
the request is in conformity with the laws and administrative practices of the requesting party;
if the information requested were within the territorial jurisdiction of the requesting party, then the competent authority of the requesting party would be able to obtain the information under the laws or in the normal course of administrative practices of the requesting party;
the request is in conformity with the BVI-Japan TIEA; and
the requesting party has pursued all means available within its territorial jurisdiction to obtain the information requested, except those that would give rise to disproportionate difficulties.
The BVI-Japan TIEA does provide for the possibility of declining a request on several grounds – for example:
where the request is not made in conformity with the TIEA;
where the requesting party has not pursued all means available within its territorial jurisdiction to obtain the information requested; and
where the disclosure would be contrary to public policy.