Wednesday, March 15, 2006

Withholding tax option in the BVI

Under the withholding tax option, tax will be automatically deducted by banks (or other paying agents) from interest and other savings income earned. In order to implement the EU Savings Tax Directive in the BVI, they will pay the withholding tax to the Commissioner of Inland Revenue as the Competent Authority.

The withholding tax rates:
  1. from 1 July 2005 - 15%.
  2. from 1 January 2008 - 20%.
  3. from 1 January 2011 - 35%.

75% of the withholding tax levied will be remitted to the tax authorities of receiving EU
Member States, while 25% will be kept by the Commissioner of Inland Revenue.
The transfers of withholding tax to the EU Member States will be made at specific periods, but EU Member States that receive this tax will not receive information relating to EU resident individuals.

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