Tuesday, March 14, 2006

The British Virgins Islands and EU Savings Tax Directive, part two

Continued from British Virgins Islands and EU Savings Tax Directive.

On the 22nd of April, 2005, the British Virgin Islands Government announced that it will
implement a transitional withholding tax on bank interest or other savings income which is earned by the residents of the EU on investments held in the countries of their residence,
including other EU Member States as well as dependent and overseas territories.

As it is stated in the directive, there are 2 options how to proceed: automatic exchange of information and withholding tax.

The BVI has decided to offer the choice between the withholding tax option or the automatic exchange of information option to EU resident individuals. As to banks and other paying agents, they can offer EU resident individuals deduction of withholding tax or exchange of information.

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