British Virgin Islands tax system: audit, reporting and optimization of taxation of BVI companies and individuals: VAT, income tax and capital gains
Basic taxes (briefly)
|Personal tax||Not charged unless the individual is an employee of a BVI company|
|Corporate tax (in detail)||No - for offshore companies|
|Capital gains tax. Details|
|Other taxes||Payroll tax for companies employing local employees, Real estate taxes|
|Government fee||350 USD|
|Stamp duty||on real estate transactions 12% (for non-residents), 4% (for residents)|
International tax agreement
|UK (Switzerland, Japan)|
|Australia, United States, Canada, China, Czech Republic, Denmark, Faroes, Finland, France, Germany, Greenland, Guernsey, Iceland, India, Ireland, Japan, Netherlands Antilles, Netherlands, New Zealand, Norway, Poland, Sweden, United Kingdom|
BVI Business companies are exempt from any taxation, regardless their source of income. The only tax existing in the BVI is payroll tax for companies employing local working force; the current rate is 8%, first $10 000 are tax exempt.
Annual government fee
The BVI company must pay an annual fee to the government, depending on the maximum volume of shares permitted to issue and the date of incorporation of the company.
- Companies with a share capital up to US$50,000 pay US$350 per year.
- Companies with a share capital more than US$50,001 pay the sum of US$1,100 per year.
Stamp duty is levied at a rate of 12% on real estate transactions for non-BVI citizens.
The rates are lower for the citizens of the BVI - 4%.
Capital Gains Tax
Taxation of Trusts
Trust income is exempt from tax if:
- the trust is created by or on behalf of a non-resident person;
- and owns no land in the BVI;
- and does not carry on business in the BVI.
Personal Income Tax
BVI income tax is not levied, unless the individual is an employee working for the BVI.
Foreign exchange control
Payroll taxes. Social Security
Payroll tax and social contributions are paid by the self-employed and employers doing business in the BVI.
The payroll tax rate is 10% for small companies and up to 14% for large employers.
8% of the remuneration can be reimbursed at the expense of employees.
The first 10,000 USD is not subject to payroll tax.
Social contributions are paid at a rate of 4% by employees and at a rate of 4.5% by employers.
Real Estate Taxes
For citizens and companies of the BVI, land tax is levied at the rate of 3 USD per year for the first acre and 1 USD for each subsequent acre.
For foreign citizens, this tax is 50 USD per year for each first half acre and 150 USD for the second half acre and 50 USD for each subsequent half acre of land.
Real estate tax is 1.5% per annum of the estimated annual rental amount of real estate.
Double Tax Treaties
The British Virgin Islands signed a double taxation treaty with the United Kingdom, and thus the BVI was covered by such treaties between the United Kingdom and Switzerland and Japan. In 2009, the British Virgin Islands signed Bilateral Information Exchange Agreements (TIEA) with 7 Nordic countries - Denmark, Faroe Islands, Finland, Greenland, Iceland, Norway and Sweden. The BVI and the Nordic countries have also signed commercial agreements for the avoidance of double taxation for air and water transport companies and individuals.
To date, the British Virgin Islands has one Double Taxation Agreement with Switzerland and 22 Information Exchange Agreements (TIEA) with various countries:
Australia, Great Britain, Germany, Guernsey, Greenland, Denmark, Iceland, India, Ireland, Canada, China, Netherlands, Netherlands Attila, Norway, Poland, USA, Faroe Islands, Finland, France, Czech Republic, Sweden, Japan.
The country has joined the Hague Convention, which abolishes the requirement for legalization of foreign official documents and replaces it with the Apostle stamp.
Taxes of BVI
|Min. rate for corporate tax||No|
|Capital gains tax||No|