Economic Substance




Rule 3 - non-residence claim

Evidence which the ITA will accept to support the claim in rule 2 includes:

(a) a letter or certificate from, or issued by, the competent authority for the jurisdiction in question stating that the entity is considered to be resident for tax purposes in that jurisdiction, or

(b) an assessment to tax on the entity, a confirmation of self assessment to tax, a tax demand, evidence of payment of tax, or any other document, issued by the competent authority for the jurisdiction in question.


Rule 6 - non-residence claim

Where an entity is unable to provide evidence of the sort required under Rule 3 in respect of any financial period within the period fixed by regulations for submission of information in respect of that financial period, the entity may apply to be treated as provisionally resident in a jurisdiction outside the BVI pending submission of the evidence required to establish that fact. The ITA shall accede to that application only if one or more of the conditions set out in rule 10 are met.

Rule 10 –non-residence claim

The conditions for granting provisional treatment as tax resident outside the BVI are as follows:

(1) The entity has established its tax residence in the jurisdiction in question for the previous financial period to the satisfaction of the ITA, and certifies that its tax residence has not changed in the intervening period, or

(2) The entity supplies (within the period fixed for the return of information following the end of the financial period) the most recent available documentary evidence of tax residence in that jurisdiction which complies with the requirements of rule 3, and certifies that its tax residence has not changed in the time since the period to which the documentary evidence relates, or

(3) The entity evidences either that it has been too recently formed, or that it has too recently assumed tax residence in the jurisdiction in question, for there to be any documentary evidence of its tax residence which satisfies the requirements of rule 3, and produces other evidence to demonstrate that it met the criteria for tax residence in that jurisdiction during the financial period in question.


Rule 24 –Outsourcing services

Where any aspect of relevant activity is carried out for a legal entity by a third party, the legal entity must, as part of its submissions under section 9(6A) of the BOSS Act:

(a) identify the name of the third party which carries out the income-generating activity on its behalf;

(b) identify what activities, and what proportion of the entity’s total income-generating activity, is carried out by the third party;

(c) identify the geographical location of the activities carried out by the third party

(d) state how the legal entity monitors and controls the activity carried out on its behalf by the third party;

(e) state the resources employed by the third party in performing the outsourced activity.


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