BVI Government To Investigate Stamp Duty Evasion

by Amanda Banks, Tax-News.com, London

17 April 2006

The government of the British Virgin Islands has launched an investigation into allegations that a number of properties in the jurisdiction have changed hands at less than their true value to avoid stamp duty.

In a prepared statement, Minister for Finance Ronnie Skelton announced that he has asked the attorney general to begin an investigation into the allegations, which were made in the Public Accounts Committee's report.

Mr Skelton indicated that the government will not hesitate to act if it finds any evidence of wrongdoing, saying that it was the duty of all residents to pay their lawful taxes.

According to the committee's report, at least four large properties were sold under their true value to deliberately avoid paying the correct stamp duty. The properties in question, mainly hotels and resorts, were reportedly sold for sums of between $600,000 and $3 million.

The committee has warned that such transactions could hurt the BVI's financial services industry.

The committee has also examined transfers of property for between $250,000 and $500,000 from June 18, 2004, to June 19, 2005, and property selling for more than $500,000 during the period June 1, 2004, to June 14, 2005.

Stamp duties are paid at a rate of 12 percent by both Belongers (those born in the BVI) and non-Belongers.

Lawmakers were also urged by the committee to modernise the Stamp Duty Act, which has been on the statute book for well over a century.

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