British Virgin Islands signs tax information exchange agreement with Canada

On 21 May 2013, the government of the British Virgin Islands (BVI) signed a tax information exchange agreement (TIEA) with the Canadian government. The BVI is now party to 24 TIEAs, with a number of TIEAs recently having come into force with major economies, including India, China, the Czech Republic, Ireland, Iceland and Germany. TIEAs facilitate the exchange of tax information between two jurisdictions and are utilised to help prevent tax evasion (where no tax treaty already exists).

The BVI/Canada TIEA is significant due to changes introduced to Canadian tax laws as a consequence of the 2007 Canadian Budget, which provides beneficial tax treatment for business income repatriated from TIEA jurisdictions, such as the BVI. It is understood that under Canadian law active business income of a company resident in a TIEA jurisdiction is eligible for tax-free dividend repatriation to a Canadian parent as ‘exempt surplus’, thus allowing the Canadian parent to benefit from the BVI’s zero-rate corporate tax regime.

Additionally, passive business income, such as interest received from another foreign affiliate resident and carrying on an active business in a third jurisdiction (also being a TIEA or double-taxation treaty jurisdiction) may also qualify as ‘exempt surplus’ so long as the amount is deductible in computing active business income of the first affiliate…

If you are registered and logged in to the site, click on the link below to read the rest of the Appleby briefing. If not, please register or sign in with your details below.

Sign in or Register to continue reading this article

Sign in

Register

It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer

 

Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.

 

Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.

 

Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Briefings from Appleby

View more briefings from Appleby

Analysis from The Lawyer

View more analysis from The Lawyer

Overview

1st Floor
3 Copthall Avenue
London
EC2R 7BH
UK
http://www.applebyglobal.com

Total staff: 528
Partners: 64