Following a meeting of the Council of the European Union on 17 October 2023, the British Virgin Islands (“BVI”) was removed from the EU list of non-cooperative jurisdictions for tax purposes (Annex I), the EU’s so-called “blacklist” (the “EU List”). The Council’s decision reverses its earlier announcement made on 14 February 2023, which initially added the BVI to Annex I.
The BVI was listed because the OECD found in November 2022 it was only “partially compliant” on international exchange of information requirements. As a rating below “largely compliant” is one of the criteria that determines the EU List, the BVI was added to Annex I as a formality and matter of process. This was noted by the EU Council which stated that this was the “first time” the BVI had been included in the EU List (Annex I) and reflected the compliance process of the “OECD standard on exchange of information on request”.
As the BVI government stated, this finding did not take into account key legislative changes made during 2022 and which came into force in 2023. The BVI Government requested a supplementary review be granted by the OECD Global Forum that would more accurately reflect the BVI’s current legislative status. Supplementary reviews are only granted by the OECD forum where previous deficiencies have been recognised.
The OECD granted the BVI government’s request, which has now led to the removal of the BVI from the EU List (Annex I). This decision is most welcome and demonstrates the commitment of the BVI Government and financial services industry to maintain a high level of international cooperation and recognises the BVI’s effective and appropriate regulatory framework.