22 Aug 2013

Virgin Islands in tax talks with US

8:12 am on 22 August 2013

The British Virgin Islands has begun talks with the United States over compliance with a law designed to crack down on offshore tax evasion.

The BVI is one of the world's biggest offshore trust jurisdictions. It has about 30,000 people and 500,000 registered companies.

Businesses and investors can claim they are based on the islands and so avoid taxes in countries where their work is carried out.

But the BBC reports rules coming into force next year will mean US taxpayers must disclose greater detail about assets held abroad.

Premier Orlando Smith said said his administration was negotiating an "intergovernmental agreement" to comply with the US Foreign Account Tax Compliance Act.

"We are of the very considered opinion that this course is the best one to adopt for the BVI," he said.

Last week, the Cayman Islands agreed to provide information on accounts held by US citizens and residents.

The BBC reports officials in the Bahamas and Bermuda have also said they intend to comply with the US regulations.