How to Comply With Economic Substance Laws in the BVI and Cayman
June 27, 2019 | 10AM EDT / 3PM BST
In an effort to address concerns about transparency and improve tax governance globally, European Union member states have produced a Code of Conduct for Business Taxation as well as a blacklist of non-cooperative jurisdictions in relation to harmful tax practices. Appearing on the list has the potential to significantly hurt a country’s reputation and limit its ability to engage in financial transactions with EU member states and beyond.
As a result of the EU’s efforts, many low- or zero-tax jurisdictions, including the British Virgin Islands (BVI), Cayman Islands and Crown Dependencies, have recently enacted legislation to ensure that entities have economic substance in their jurisdictions.
These new country-specific regulations, known as economic substance laws, are all broadly similar since they seek to comply with the EU directive, though they do contain key variations that must considered when reviewing entity status. Relevant entities that fail to meet the new requirements may face substantial fines, being struck off and/or reputational damage.
This webinar provides background on economic substance legislation, including a detailed look at the BVI’s new legalisation. During this webinar we will cover:
- The EU’s efforts to curb unfair tax competition, including the creation of the first EU blacklist in December 2017 and subsequent changes
- Commonalities and differences of new economic substance legalisation
- A detailed look at the BVI’s Economic Substance (Companies & Limited Partnership) Act of 2018
- Case study scenarios, detailing what should be looked for and potential pitfalls
- How to ensure your entities comply with economic substance legalisation in the BVI and other jurisdictions