Further to our earlier communications regarding the BVI’s Economic Substance legislation, we would like to bring to your attention that we are now in the first economic substance reporting (“ES Reporting”) year, which means many entities are required to submit their annual economic substance return starting from June 2020.
Why is ES Compliance and ES Reporting important to me?
If you hold BVI entities that are tax resident in the BVI and engaged in the Relevant Activities, you will need to have adequate economic substance in the jurisdiction. Enforcement actions for incompliance will include not be limited to financial penalties, entities being struck off, and spontaneous exchange of information with relevant overseas competent authority.
What is the important next-step to take?
- If you have NOT classified your entity in terms of which Relevant Activities it carries out, it is STRONGLY RECOMMENDED that you do so immediately
You may want to use our ES classification service so that you can have a thorough and written classification report with board/director resolution as documentary evidence to support your entities’ ES position in the ES Reporting process.
- If you have already sought professional Classification services, you should know by now if your entity is in-scope of the legislation and whether there is a need for you to establish In-jurisdiction Substance in the BVI.