Government has retained a UK attorney at a cost of up to $400,000 to draft a piece of legislation for the territory’s financial services industry.
Specifically, the Premier Smith government hired Queen’s Counsel Michael Furness to draft laws in an area referred to as ‘economic substance’.
Economic substance is achieved when a business’ economic activity is proportionately reflected in the jurisdiction where it generates its profits and pays its taxes.
The BVI government has been instructed to implement the requisite legislation that supports economic substance by the end of December. With only three months remaining till that deadline, Cabinet decided to waive the tendering process that was required to contract attorney Furness.
The waiver was approved during the September 12 sitting of Cabinet.
The BVI will be added to the European Union’s (EU) dreaded ‘blacklist’ of tax haven jurisdictions and subjected to diplomatic sanctions if it does not have these laws in place by the mandated time.
The blacklist was created to categorise jurisdictions that ‘do not respect the EU’s tax transparency standards’.
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