During the negotiation stage prior to the implementation of the Foreign Account Tax Compliance Act by the US the British Virgin Islands managed to negotiate what the US Treasury is referring to as ‘more favourable terms’ than earlier executed versions of the intergovernmental Agreements (IGA). This is possibly due to the admittance by the US that the BVI would not be able to comply with certain aspects of FATCA due to domestic legal impediments.
The provisions which are perceived more favourable concern the following;
- Paragraph G of Section VI of Annex 1, which addresses alternative procedures for new accounts opened prior to entry into force of the IGA; and
- Paragraph H of Section VI of Annex I, which addresses alternative procedures for new entity accounts opened on or after 1 July 2014, and before 1 January 2015
Letters have gone out to a variety of countries with earlier executed agreements to enable them to also take advantage of the later modifications.
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