Wednesday, March 01, 2006

Tax information exchange between the BVI and Australia

The enforcement activities involving offshore transactions have recently been intensified by the Australian authorities. This happened because it became apparent that many funds flowing in and out of the country were being transmitted through offshore territories.

Australia's Deputy Commissioner of Taxation, Paul Duffus stated that about an A$5 billion (which is US$3.7 billion) leaves Australia for these jurisdictions every year. He also indicated that the government suspected that the money might flow through these countries illegitimately.

As a consequence of this came the talks of the Australian Tax Office (ATO) with the British Virgin Islands, the Cayman Islands, Anguilla, Antigua & Barbuda, Grenada, Guernsey, Jersey, the Isle of Man and the Netherlands Antilles. These talks were aimed at completing tax information exchange agreements.

Last year the tax information exchange agreement with the Bermudas was concluded. Perhaps, it's not long to wait until the agreement with the British Virgin Islands will be concluded... as well as with other countries from the list.

It is essential that the BVI concluded this agreement under mutually profitable conditions and that the interests of offshore businessmen and investors were taken into account and did not suffer as far as businessmen and investors hold their businesses on legal bases as well as preserve the image of BVI IBCs and offshore jurisdiction as a whole.

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