09/08/21

BRITISH VIRGIN ISLANDS: Jurisdiction Says New Global Tax Rules Should Appreciate Offshore IFCs.

As published on tax-news.com, Friday 6 August, 2021.

The British Virgin Islands Government has released a statement expressing concerns on the proposals being discussed by the OECD to establish modernized rules for the digitalized economy, including a minimum global corporate tax rate.

During two-day talks in London that concluded on June 5, finance ministers from the United States, Japan, Germany, Britain, France, Italy, and Canada – collectively the G7 – agreed in principle to a global minimum rate of 15 percent, applied on a per-country basis. The agreement on a 15 percent rate is in reference to proposals from the OECD on a minimum corporate tax burden for consumer-facing multinational firms, which is to be combined also with new rules on the distribution of taxing rights on their profits.

The British Virgin Islands' Premier and Minister of Finance, Andrew Fahie said of the G7 agreement: "As a small economy, I fully appreciate that Governments must focus on avenues to increase revenues, especially in a post-pandemic era. We all get that. However, it is important to remember that the commitment of the G20/OECD Inclusive Framework is to deliver a 'consensus-based solution' to the challenges arising from digitalisation. Therefore, we await the July meeting of G20 Finance Ministers and Central Bank Governors."

The BVI Government said, whilst negotiations are still continuing, BVI would like to have seen a greater acknowledgment of the "positive contributions of international finance centers to the global economy".

Fahie said: "Economic research conducted on behalf of the BVI shows that International Finance Centres have a positive role to play in the global economy and actually help boost developing economies' tax revenues by billions annually, support millions of jobs, and enable significant trade across the globe."

"Whilst we continue to monitor these developments, BVI remains confident of the attractiveness of its brand for international clientele and is keen to continue to support our client base whilst maintaining and expanding on our record as a responsible international financial centre. We will continue to monitor international initiatives and to be part of the discussions with the OECD, as a recognised standard setting body in this area," he concluded.