The fiscal representative in BVI is an appointed third party that handles the submissions and the filings on behalf of the BVI taxpayer. Appointing a tax representative is a step that allows company owners to ensure full compliance with local tax laws.
While the British Virgin Islands are known as a tax-neutral jurisdiction – which is an important advantage for many investors interested in BVI company formation – there are certain filing requirements apart from the ones related to corporate taxes, which companies should be mindful of.
Investors who are interested in British Virgin Islands company formation can easily meet the requirements for compliance when they work with a local tax representative, such as one of our experts.
The role of the fiscal representative in BVI
The fiscal or tax representative will handle the mandatory filings with the tax authorities, as well as communicate with the Virgin Islands International Tax Authority as needed. We summarize some of the key issues with which a tax representative can assist investors:
- Making the needed payroll, social security, and national health insurance filings;
- Making any inquiries concerning due applications with the International Tax Authority;
- Make an application to change the financial period of the company (as subject to the applicable rules and except the first financial period of the company);
- Verify, correct, and complete any relevant filings before submission to the Tax Authority;
- Handle other essential tax matters.
Upon request, US investors can also receive assistance for meeting the requirements of the Foreign Accounts Tax Compliance Act, or FATCA, when they work with a fiscal representative in BVI.
For those interested in knowing more about FATCA and its implications, or about other issues such as the automatic exchange of information, we recommend discussing your questions with our lawyers in BVI.
BVI’s taxation regime
The British Virgin Islands are unique in their corporate taxation principles in that they do not impose a corporate income tax, as is the case in many other jurisdictions around the world. There are also no capital gains taxes, and insurance companies are also exempted. This also means that companies are not categorized as being residents of the British Virgin Islands for tax purposes.
One exemption to tax neutrality applies in the case of BVI-incorporated entities that own land. In their case, stamp duty will apply. When working with a fiscal representative in BVI, investors have the advantage of being fully informed of the applicable tax exemptions, the compliance for corporations that they do need to adhere to, as well as other issues.
Some of the taxes that do apply in the British Virgin Islands are:
- The employer’s social security contribution of 4.5% of the employee’s remuneration; however, this is subject to a cap;
- The employer’s contribution to national health insurance amounting to 3.75% of the employee’s salary (subject to a cap);
- 2% or 6% of the gross salary as the employer’s portion of the payroll tax;
- Land tax of USD 50 for half an acre or less; additional taxes apply for more land, as can be described upon request by our fiscal representative in BVI.
In addition to the lack of corporate taxes for entrepreneurs who are interested in BVI company incorporation, the jurisdiction does not impose an income tax for individuals.
If you would like to know more about the advantages of opening a company in the British Virgin Islands, as well as those of using a fiscal representative in BVI, do not hesitate to reach out to our team for personalized information.
Contact us if you are interested in BVI offshore company creation.