In 2005, the Government of the Virgin Islands entered into Bilateral Agreements with each of the EU Member States in relation to reporting Savings Income information. Then in 2011 the Government amended the Mutual Legal Assistance (Tax Matters) Act, 2003 and changed the way it complies with the EU Savings Directive. Therefore, effective from 1st January, 2012, the withholding of taxes on interest payments is no longer effective. According to the Mutual Legal Assistance (Tax Matters) (Automatic Exchange of Information) Order 2011, withholding tax would be applied for the tax year ending 31st December, 2011. With effect from the 1st January, 2012, the EU Savings Directive is now complied with through automatic exchange of information. This means that all paying agents are now required to report to the Competent Authority of the Virgin Islands in the manner outlined in Article 17 of the Act.
With the implementation of the CRS the EUSD will be subsumed and this should occur by the end of 2016. The EU has already issued a repeal of the EUSD and the Virgin Islands are currently taking steps to reflect this in the laws of the Virgin Islands.
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