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BVI Announces Withholding Tax On EU Residents’ Savings Interest

by Amanda Banks, Tax-News.com, London

27 April 2005

The Government of the British Virgin Islands has announced that it will implement a transitional withholding tax on bank interest or other savings income earned by residents of the European Union on investments held in countries where they do not reside, including other EU Member States and dependent and overseas territories.

The tax, which will come into effect on 1 July 2005, was approved by the BVI and all 25 European Union Member States. Details about the tax are included in the Guide to the European Union Savings Tax Directive, published recently by the BVI government.

The Government also announced that with the exception of a new class of public funds (known as the restricted public fund), all private, professional and public mutual funds recognised or registered under the Mutual Funds Act 1996 are to be treated by the BVI as non-UCITS equivalents, and therefore are outside the scope of the Directive. Only restricted public funds will be treated by the BVI as UCITS equivalents and will therefore be considered to be within the scope of the Directive.

A comprehensive report in our Intelligence Report series examining offshore confidentiality and multilateral initiatives such as the European Savings Tax Directive is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report1.asp

 

 






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