Economic Substance Update: New Rules and Explanatory Notes released, classifications unaffected

The BVI International Tax Authority (ITA) released the Rules and Explanatory Notes (the Rules) on the Economic Substance legislation on 9 October 2019.

The new Rules reflect relatively few changes from the draft Economic Substance Code, originally published on 23 April 2019. The Rules state how the economic substance requirements may be met and provide guidance on the interpretation of the legislation and the manner in which the ITA will carry out its obligations. Click here for the ITA's summary of the main changes.

Philip Graham and Josh Mangeot discuss the release of the Rules in the tenth episode of the Harneys' Substance on Substance podcast series.

Harneys’ online classification solution

We are pleased to confirm that only minor updates were necessary to our online classification solution. Classifications already undertaken remain unaffected, and entities who have already classified themselves do not need to repeat the process (but should note that some numbering cross-references to the final Rules will have changed).

We encourage the use of our online classification solution which remains available and provides formal real-time legal advice, in the form of a legal memo, for a cost-effective fixed fee.

To learn more about our online classification solution please fill out our online query form here