The Organisation for Economic Cooperation and Development’s Global Forum Peer Review Group has accepted the government’s request for a supplementary review that — if successful — could cause the European Union to remove the territory from its blacklist of noncooperative tax jurisdictions, according to Premier Dr. Natalio “Sowande” Wheatley.
The EU Council added the Virgin Islands to its five-year-old blacklist for the first time on Feb. 14, claiming that the territory was not “sufficiently in compliance with the OECD standard on exchange of information on request.”
But VI leaders quickly fired back, suggesting that the territory doesn’t belong on the list in part because of a series of 2022 legislative reforms that took effect Jan. 1. Those reforms, they said, weren’t included in the latest OECD Peer Review, which was launched in December 2021 and covered a period stretching from 2016 to 2020.
“Having maintained a ‘largely compliant’ [OECD] rating since 2015, the [VI] was moved to a ‘partially compliant’ rating in November 2022 as the historical analysis focused on the review period and could not take into consideration important legislative developments in 2022 that would ensure the effective and efficient exchange of information,” Dr. Wheatley explained at the time.
He added that the VI government had requested a supplementary review from the OECD Global Forum that considers recent reforms that took effect on Jan. 1, including 2022 amendments to the BVI Business Companies Act and related regulations.
Last Thursday in the House of Assembly, Dr. Wheatley announced that the OECD had agreed to this request during the first week of March.
The decision, he said, followed a recent visit by a VI government delegation — including Financial Secretary Jeremiah Frett and International Tax Authority Director LaToya James — to the OECD in France.
The visit was conducted to “formally communicate the progress made by the BVI in implementing the exchange of information standard,” the premier added.
“Following the completion of the supplementary review, the VI is confident a largely compliant rating will be given,” Dr. Wheatley said. “The rating is one of the criteria that determines the EU list of noncooperative jurisdictions for tax purposes.”
He added that changes will likely be seen during the next meeting of the peer review group in October. The same month, the EU is scheduled to next update its blacklist.
On Feb. 14, the EU also added Russia, the Marshall Islands and Costa Rica to the blacklist, bringing to 16 the total number of countries and territories included.
According to the EU, the list is updated twice a year using a monitoring process that screens countries and territories against international tax standards.