BVI Initials FATCA IGA with U.S.

The Government of the British Virgin Islands ("BVI") announced that, on March 6, 2014, it concluded negotiations with the United States and initialed the final text of an Intergovernmental Agreement ("IGA") with respect to FATCA. The IGA is a Model 1B Form IGA (nonreciprocal), that will require BVI financial institutions required to comply with FATCA to provide certain information with respect to U.S. account holders to the BVI International Tax Authority, which will automatically exchange such information with the United States. According to the BVI, the IGA provides for various exceptions for nonprofit organizations and pension plans and generally should reduce the compliance burden of BVI financial institutions. The text of the IGA has not been released pending final execution. The BVI Government indicated that it would put into place shortly the final legal and administrative procedures and guidance to facilitate the implementation of the IGA. In December 2013, the BVI entered into an Intergovernmental Agreement with the United Kingdom which is similar to the IGA that was negotiated with the United States. In addition, the BVI has also committed to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and to the Common Reporting Standard developed by the OECD.

See: BVI Press Release.See also: Cabinet FATCA Materials (for Cabinet subscribers only).For more information, please contact Daniel Mulcahy and Mark Howe.