Fahie wary, says new bill on economic substance ‘very cagey’
Opposition Leader Andrew Fahie. (BVI News photo)
Leader of Opposition Andrew Fahie has said he is wary of the legislation that government is introducing to keep off the European Union’s (EU) blacklist of noncompliant tax haven jurisdictions.
The bill entitled the Economic Substance (Companies and Limited Partnerships) Act, 2018 will present stricter policies for financial services providers registered in the territory.
“I must say that this is a very cagey Act because there is no guarantee when the legislation is passed that the EU will accept it in terms of meeting the standards that they want,” Fahie said.
“We have to find a balance between how do we get the legislation approved in such a way that it satisfies the EU but it doesn’t damage the financial services industry that we have, or damage the revenue,” the opposition leader said.
While Fahie remains concerned as to whether the EU will deem the law as satisfactory once it is passed, Premier Dr D Orlando Smith said last week that his government has been consulting with EU officials for the last several months to understand and address the concerns.
The EU’s concerns are in relation to an area in financial services known as ‘economic substance’.
What is economic substance?
When a financial services provider can prove that the taxes it pays to the BVI are the result of earnings that were generated through “real economic activity” within the territory, that company is said to have achieved economic substance. In other words, proof that an offshore company is paying taxes in the BVI because it largely does its work and earns its profits in/from the BVI.
The EU has given the BVI until the end of this month to pass this law on economic substance. Premier Smith will, therefore, introduce government’s proposed economic substance bill for debate during the next sitting of the House which begins on Thursday, December 13.
Below are the requirements of the BVI’s proposed legislation on economic substance.
“The Government recognises that the legislation will create challenges for some companies and limited partnerships. The BVI is not alone in facing these challenges,” Premier Smith said in a statement last week.
The BVI will be added to the EU’s dreaded ‘blacklist’ and subjected to diplomatic sanctions if it does not have these laws in place by the mandated time.
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Props to Fahie for raising this issue. This is clearly the single most important issue facing the country at the moment.
But despite us being in the middle of election fever, and politician talk filling the airwaves, no single party leader has come out to comment on this until now.
I thought we did not have company tax in the BVI. Wasn’t the employment tax brought in to separate the old problem of 15% for local companies. And 0% for off shore companies . So all the offshore companies and local companies had zero company tax but only paid tax on employees wages.
This is why people like F—- cannot and should not be Premier. He has ABSOLUTELY NO CLUE about the Financial Services Industry. If he becomes Premier he will destroy an already fragile industry. The other thing is, he is always criticizing legislation brought forward saying it will not work, why dont you come up with suggestions, always come with an alternative solution to a problem if you disagree with the initial solution, dont just criticize because you are the opposition.
Where did you read that Fahie is opposing the upcoming legislation. You sound so stupid. All the man is saying is that this is a difficult moment for our financial services industry.
You obviously 1) Hate Fahie & 2) Did not read the article thoroughly because what you are saying is total craziness.
“The more you naked, the more dog a pull you.”
Andrew I’ll always say u could be good u could be bad for this country.When u went to ENGLAND with the Premier in regards to our issues why didn’t come.to the forefront &tell us what took place.If the premier drop the ball or not.All U said is we did our best now ur here drippling on urself.Andrew my 2 cents U CANT LEAD Us out of this doldrum.
You obviously missed it but Fahie did a press conference when he return from the UK and informed the public of what all took place. Also the Premier and Fahie did a joint press conference to inform the public of what took place in the U.K. You just hate Fahie that’s all. SMDH
We are in this mess in the BVI through the NDP who you had a set of bright boys so neither Myron, Orlando nor Ronnie can lead us for sure. I will take my chances with Fahie. He is an intelligent man who knows how to surround himself with the right people to get the right things done.