The Tax Information Exchange Agreement (Taxes on Income) (Virgin Islands) Order 2005

Made: 7th June 2005

At the Court at Buckingham Palace, the 7th day of June 2005Present,The Queen’s Most Excellent Majesty in Council

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Citation

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Declaration about exchange of information

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SCHEDULE

PART I — AGREEMENT ON THE TAXATION OF SAVINGS INCOME BETWEEN THE GOVERNMENT OF THE BRITISH VIRGIN ISLANDS AND THE GOVERNMENT OF THE UNITED KINGDOM

WHEREAS:

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Article 1 — Definitions

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Article 2 — Withholding of Tax by Paying Agents

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Article 3 — Reporting of Information by Paying Agents

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Article 4 — Exceptions to the Withholding Tax Procedure

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Article 5 — Basis of assessment for withholding tax

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Article 6 — Definition of “beneficial owner”

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Article 7 — Identity and residence of beneficial owners

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Article 8 — Definition of “paying agent”

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Article 9 — Definition of “interest payment”

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Article 10 — Withholding Tax Revenue sharing

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Article 11 — Elimination of double taxation

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Article 12 — Transitional provisions for negotiable debt securities

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Article 13 — Mutual agreement procedure

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Article 14 — Confidentiality

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Article 15 — Transitional Period

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Article 16 — Entry into force

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Article 17 — Termination

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Article 18 — Application and suspension of application

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Entities within the European Union:

Belgium

Spain

Greece

France

Italy

Latvia

Poland

Portugal

Slovakia

International Entities:

Entities in third countries:

The entities that meet the following criteria:

• (1) The entity is clearly considered to be a public entity according to the national criteria.

• (2) Such public entity is a non-market producer which administers and finances a group of activities, principally providing non-market goods and services, intended for the benefit of the community and which are effectively controlled by general government.

• (3) Such public entity is a large and regular issuer of debt.

• (4) The State concerned is able to guarantee that such public entity will not exercise early redemption in the event of gross-up clauses.

PART II — Exchange of Notes

Note from Her Majesty’s Government

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I refer to the text of the proposed model “Agreement on the taxation of savings income between the Government of the British Virgin Islands and [EU Member State that is to apply automatic exchange of information]” that was approved at the High Level Working Party of the Council of Ministers of the European Union of 22 June.

In view of the above mentioned agreed texts, and respecting the constitutional relationship between the United Kingdom of Great Britain and Northern Ireland and the British Virgin Islands, I have the honour

• to confirm to you the arrangements contained in the agreement on the taxation of savings income at Appendix 1 to this letter;

• to confirm that the said arrangements may come into effect on 1st January 2005, or the date of application of Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments, whichever is later subject to the notification to each other that internal legislative formalities for the coming into effect of these arrangements are completed;

• to confirm our mutual commitment to comply at the earliest date with our said internal legislative formalities and to notify each other without delay through the formal channels when such formalities are completed;

• to confirm that the said arrangements shall be made on the understanding that future treaties (bi-lateral and multi-lateral) shall not encompass or be extended to the British Virgin Islands save after prior consultation with the Government of the British Virgin Islands; furthermore, any amendments to Council Directive 2003/48/EC pursuant to Article 18 thereof shall not apply or be extended to the British Virgin Islands save after prior consultation with and after seeking the consent of the Government of the British Virgin Islands;

I have the honour to confirm that, if the above is acceptable to your Government, this letter together with its Appendix 1 and your confirmation shall together form a binding agreement and constitute our mutual acceptance and making of the arrangements between the United Kingdom of Great Britain and Northern Ireland and the British Virgin Islands.

Please accept, Sir, the assurance of our highest consideration,

Bill Rammell

Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs

For the Government of the United Kingdom

Done in London on 22 July 2004 in three copies.

Reply from the Government of the British Virgin Islands

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I have the honour to acknowledge receipt of your letter dated 22 July 2004, which reads as follows:

Sir, I refer to the text of the proposed model “Agreement on the taxation of savings income between the Government of the British Virgin Islands and [EU Member State that is to apply automatic exchange of information]” that was approved at the High Level Working Party of the Council of Ministers of the European Union of 22 June. In view of the above mentioned agreed texts, and respecting the constitutional relationship between the United Kingdom of Great Britain and Northern Ireland and the British Virgin Islands, I have the honour - to confirm to you the arrangements contained in the agreement on the taxation of savings income at Appendix 1 to this letter; - to confirm that the said arrangements may come into effect on 1 January 2005, or the date of application of Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments, whichever is later subject to the notification to each other that internal legislative formalities for the coming into effect of these arrangements are completed; - to confirm our mutual commitment to comply at the earliest date with our said internal legislative formalities and to notify each other without delay through the formal channels when such formalities are completed; - to confirm that the said arrangements shall be made on the understanding that future treaties (bi-lateral and multi-lateral) shall not encompass or be extended to the British Virgin Islands save after prior consultation with the Government of the British Virgin Islands; furthermore, any amendments to Council Directive 2003/48/EC pursuant to Article 18 thereof shall not apply or be extended to the British Virgin Islands save after prior consultation with and after seeking the consent of the Government of the British Virgin Islands. I have the honour to confirm that, if the above is acceptable to your Government, this letter together with its Appendix 1 and your confirmation shall together form a binding agreement and constitute our mutual acceptance and making of the arrangements between the United Kingdom of Great Britain and Northern Ireland and the British Virgin Islands. Please accept, Sir, the assurance of our highest consideration

I am able to confirm that the Government of the British Virgin Islands is in agreement with the contents of your letter dated 22 July 2004.

Please accept, Sir, the assurance of my highest consideration,

Orlando Smith

The Honourable Dr. D. Orlando Smith

Chief Minister

For the Government of the British Virgin Islands

Done at Tortola on 11th April 2005 in the English language in three copies.

Signed

A. K. Galloway — Clerk of the Privy Council

Explanatory note

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Footnotes

[^f00001]: 1988 c. 1. Section 815C was inserted by section 146(1) of the Finance Act 2000 (c. 17) and amended by section 88(2) of the Finance Act 2002 (c. 23) and section 198 of the Finance Act 2003 (c. 14).

Editorial notes