Automatic exchange of information is the systematic and periodic transmission of “bulk” taxpayer information by the source country to the residence country (i.e. where the taxpayer is resident for tax purposes). The information generally exchanged on an automatic basis relates to financial information. However, automatic exchange of information can also be used to transmit other types of useful information such as change of residence.
Presently the Government of the British Virgin Islands has an obligation to exchange information automatically under the following Agreements:
- The European Union Council Directive 2003/48/EC (brought into force in 2005)
- The Convention on Mutual Administrative Assistance in Tax Matters (extended to the Government of the British Virgin Islands by the Government of the United Kingdom and brought into force as of March, 2014)
- The Agreement between the Government of the British Virgin Islands and the Government of the United Kingdom of Great Britain and Northern Ireland to improve International Tax Compliance – UK FATCA (signed in November, 2013)
- The Agreement between the Government of the British Virgin Islands and the Government of the United States to improve Tax Compliance and to implement the Foreign Account Tax Compliance Act – US FATCA (signed in June, 2014)
In accordance with each Agreement, all eligible Financial Institutions or paying agents would be required to submit the relevant information to the Government of the Virgin Islands on an annual basis and in turn the Government of the Virgin Islands would exchange the information with the specific partner jurisdiction.