Monthly Archives: June 2017

The BVI’s AEOI portal is now open for CRS filings. Are you ready?

The BVI International Tax Authority (ITA) announced yesterday that the BVI’s AEOI portal, BVI FARS, is now open for reporting under the OECD’s Common Reporting Standard (known as CRS)[1]. So, what do you have to do and by when?

The ITA has published an updated user guide but, since I know that most people are already glossing over and thinking about clicking on the more interesting email about drinks plans this evening which just flashed up in the right hand corner of their screens, I will try to summarise it as briefly as possible.

We are celebrating a small triumph in the BVI by beating our Cayman friends and rivals this year (in what has to be one of the world’s most boring races) to being ready to receive FATCA[2] filings. BVI funds have been diligently registering on BVI FARS and filing their FATCA reports, which were due by 31 May 2017. If you have missed the deadline, try not to panic and get in touch.

Despite a small delay (okay, I admit, Cayman beat us on this one) BVI FARS is now ready for CRS registration and so it’s now time to take the additional step of extending your registration on BVI FARS to cover reporting and filing under CRS. You can do this by logging into the BVI FARS portal as usual and changing the reporting obligations to include CRS. Actually, this really is pretty last minute and you only have until 30 June to register, yes that’s next Friday!

CRS filings have to be made on BVI FARS by 31 July 2017. A separate filing has to be submitted for each reportable jurisdiction in which the fund has reportable accounts. As with the FATCA process, you can either submit CRS filings using the manual entry using the online web form or by uploading an XML file that complies with the CRS XML Schema v.1.0, published by the OECD.

Any reports required to be made under UKCDOT[3] (the parallel reporting system for UK accounts which came in before CRS and will fall away in 2018) must also be made this year by submitting a CRS filing with the UK as the receiving country. Some accounts which are not yet required to be reported under CRS because they are pre-existing lower value individual accounts[4] and pre-existing entity accounts[5] will need to be reported under UKCDOT because the deadlines for reviewing those accounts under UKCDOT have now passed. The maximum required to be reported under the two regimes should be reported.

Don’t be caught out by the obligation under CRS which also requires investment managers and advisers, licensed in the BVI, to register on BVI FARS. Under FATCA, they weren’t required to do this because they were classified as Non-reporting FFIs.

So what are the key dates in 2017 for BVI funds and AEOI?

30 April 2017 All BVI Reporting Financial Institutions (including all BVI funds) were required to have registered with BVI FARS for FATCA.
31 May 2017 All BVI Reporting Financial Institutions should have made their FATCA reports. We recommend filing a nil return, even if you have no US Reportable Accounts.
30 June 2017 All BVI Reporting Financial Institutions (including funds and investment managers and advisers) must register on BVI FARS for CRS.
31 July 2017 All BVI Reporting Financial Institutions must file a report or a nil return on BVI FARS for CRS.
31 December 2017 All pre-existing lower value individual accounts and pre-existing entity accounts must have been reviewed for CRS.

 What else should BVI funds have done or be doing?

Most funds and their managers have been preparing for AEOI compliance and have been taking steps to ensure that they are complying with their notification, reporting and ongoing requirements but if you are still in the dark you should be:

  • Reviewing the fund’s existing documentation to make sure AEOI obligations are properly disclosed and the fund can get all the self-certification and other documents it needs.
  • Creating and implementing AEOI policies.
  • Reviewing pre-existing accounts. Financial Institutions have been given until 31 December 2017 to review pre-existing entity accounts and pre-existing lower value individual accounts. The review of all pre-existing accounts must have been completed by 31 December 2017 and all reportable accounts must be reported in 2018.
  • Appointing an authorised person as a principal point of contact to liaise with the ITA.

If you need more information or assistance with your filings, or want to discuss any of this in person, just contact one of our blog team and we will be happy to help.

Fiona has also been blogging on what is happening with AEOI in Cayman and you can read her blog here.

 

 

[1] OECD sponsored Multilateral Competent Authority Agreement and certain bilateral agreements or tax treaties regarding the common reporting standard on automatic exchange of information.

[2] US Foreign Account Tax Compliance Act

[3]  The Crown Dependencies and Overseas Territories International Tax Compliance Regulations

[4] Those with a value of less than US$1m.

[5] Pre-existing Entity Accounts with a value of less than US$250,000 do not need to be reviewed unless and until the balance exceeds US$250,000.

Marketing tips for fund managers

I’m sorry if I got anyone’s hopes up with the title to this post. Unfortunately, this is not going to give fund managers magical insights on how to secure that crucial investment to launch a fund or take an existing fund to the next level. However, this post may help keep some fund managers out of trouble!

I am often approached by clients and contacts with queries about the marketing of their fund interests internationally. This may be because my business cards and email signature state that I am a “Practitioner of Foreign Law” – perhaps people think I am able to advise on the laws of every “foreign” jurisdiction!

The bad news for people with such queries is that I am usually not qualified to answer specific queries on marketing in particular jurisdictions – I only practice Cayman and BVI law. However, the good news is twofold:

1. Asking these types of questions is the right thing to do! All our fund manager clients are (hopefully) aware of the various laws, regulations and rules that govern marketing fund interests in their home country. What every fund manager should also know is that they need to tread very carefully when marketing fund interests overseas. My fellow Offshore Funds Bloggers have written some useful posts on the European Union’s Alternative Investment Fund Managers Directive here and here. Although the funds marketing regime in Europe can be considered one of the most stringent in the world, it is worth remembering that almost every other jurisdiction will have laws and regulations on how (and to whom) fund interests may be marketed there. For example, managers in the United States will be very familiar with the careful planning needed to ensure that their funds fall within the various exemptions and safe harbours of the Securities Act and Investment Companies Act (not to mention state-by-state blue sky filing requirements!). Continue reading

Cayman AEOI portal re-opens – get your filings ready…

Don’t all rush at once with your XML files, but the Cayman Islands Tax Information Authority (TIA) confirmed last week that its automatic exchange of information (AEOI) portal  is now open again for notification and some reporting functions. Those fund administrators who have taken on the task of processing the notification and reporting obligations for Cayman funds are now busy making sure that the funds are properly registered on the portal so that they can file the relevant reports later in the Summer under the Cayman legislation implementing US FATCA[1] and the OECD’s Common Reporting Standard (or CRS[2] as everyone knows it).

So, what are the key dates in 2017 for Cayman funds and AEOI?

Early May 2017 New AEOI portal user guide for CRS/US FATCA was published here
Mid May 2017 CRS and US FATCA notification/registration function now available on AEOI portal, including variation in reporting obligation, and US FATCA XML reporting
June 2017 Updated AEOI portal user guide available with detailed CRS user guidance
Mid June 2017 CRS reporting function available on AEOI portal
30 June 2017 CRS and US FATCA notification/registration deadline for Cayman financial institutions
31 July 2017 CRS and US FATCA reporting deadline for Cayman reporting financial institutions, for the 2016 reporting year
31 July 2017 Deadline for correcting any errors for US FATCA reports for 2014 and/or 2015
31 December 2017 The review of Pre-existing Lower Value Individual Accounts and Pre-existing Entity Accounts for CRS must be completed

What else should Cayman funds have done or be doing?

Continue reading