The Australian Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, Chris Bowen, and the Premier of the British Virgin Islands (BVI), the Hon Ralph O’Neal OBE, today announced the signing of a Tax Information Exchange Agreement (TIEA) between Australia and the BVI.
In a joint news release, the countries said they are committed to eliminating “harmful tax practices, and that the agreement provides for “full exchange of information on request”, in both criminal and civil tax matters.
Under the terms of the TIEA, Australia and the BVI have agreed not to apply prejudicial or restrictive measures based on harmful tax practices to residents or nationals while the TIEA is in force and effective. Further, Australia will remove any governmental references to the BVI as a ‘tax haven’ and will list the BVI as an ‘information exchange country’ in the Taxation Administration Regulations 1976. This will provide residents of the BVI with access to reduced withholding tax rates on distributions of certain income they may receive from Australian managed investment trusts.
In addition to the TIEA, Australia and the BVI have signed an agreement for the allocation of taxing rights with respect to certain income of individuals, which will provide benefits to Australian and BVI residents.
Australia and the BVI have also agreed to enter into discussions, when appropriate, to foster further co-operation in areas of mutual interest.
Mr Bowen said: *”The TIEA between Australia and the BVI demonstrates both jurisdictions’ commitment to international cooperation and effective exchange of information. The BVI’s co-operation in fostering these international standards of transparency and exchange of information enhances its reputation as a globally integrated and responsible financial centre. Australia is at the forefront of efforts to implement widespread international cooperation on tax matters and is pleased to welcome the BVI to its TIEA network. This is the fourth TIEA signed by Australia and the second signed by the BVI.”*
The joint release also speaks to the strong commitment of the Governments of Australia and the BVI to international standards on anti-money laundering and counter-terrorism financing, as set by the Financial Action Task Force. The Australian Government took the opportunity to welcome the BVI’s admission as a full member to the International Organisation of Securities Commissions where, Mr. Bowen said, it joins more than 100 jurisdictions with recognised high standards of regulation and compliance.
The Hon Ralph O’Neal said: *‘‘In addition to the TIEA, we have also negotiated a further package of measures that will bring benefits to the BVI, including technical assistance, non-discriminatory tax treatment and an agreement covering the allocation of taxing rights for students and Government employees. The BVI looks forward to an ongoing cooperative relationship with Australia.”*