Government has hired a second attorney from the United Kingdom to draft legislation intended to keep the BVI off the European Union’s (EU) blacklist of tax haven jurisdictions.
Cabinet approved for junior counsel Jack Rivett to assist the previously hired Queen’s Counsel, Michael Furness, in drafting the laws.
According to a Cabinet’s statement on its October 3 meeting, the government will not be incurring any additional expenses for the second attorney.
Government initially retained the first attorney, Furness, at a cost of up to $400,000 but his legal fees have been reduced to $300,000.
Junior counsel Rivett will now work in conjunction with Furness at a cost not exceeding $100,000, government said.
Furness and Rivette were specifically hired to draft local laws in an area of financial services known as ‘economic substance’, within which the EU says the BVI is deficient.
The EU wants the BVI to show it has economic substance by ensuring the taxes it collects within the financial services sector were generated through real economic activity in the territory. 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 BVI government has been instructed to implement the requisite legislation that supports economic substance by the end of December 2018.
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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