Offshore Litigation

Contributors

Jonathan Addo
Jonathan Addo
  • Jonathan Addo

  • Partner
  • British Virgin Islands
Lisa Akiri
Lisa Akiri
  • Lisa Akiri

  • Senior Associate
  • London
Janeen Al-Jadir
Janeen Al-Jadir
  • Janeen Al-Jadir

  • Associate
  • Cayman Islands
Pavlos Aristodemou
Pavlos Aristodemou
  • Pavlos Aristodemou

  • Partner
  • Cyprus

Tax Transparency: A Two-Way Mirror

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The Rule of Law is flavour of the month in the Common Law world. A recent constitutional challenge in the BVI courts brought by Harneys reminds us all that information exchange between States should be a two-way street. Today’s legally significant decision in the conjoined cases of Quiver Inc. & Friar Tuck Limited v International Tax Authority heard in the BVI Administrative Court confirms this principle. The Court (rightly) found that BVI public bodies must strike a balance when discharging their international obligations in the mutual exchange of information by ensuring that procedural fairness safeguards for BVI persons are observed in the performance of those obligations. In practical terms, this means that BVI public bodies must disclose to the recipient sufficient information about the Requesting State and the underlying request to enable the recipient to challenge its validity where appropriate. This principle we think could and should extend to the entire Common Reporting Standard (CRS) framework as implemented domestically in the BVI. In fact we consider that it should not be confined to requests made under Tax Information Exchange Agreements (TIEA’s) alone but flow into other such requests made by any signatory of the CRS framework to the relevant BVI authority. Although the Quiver Inc and Friar Tuck case proceeded by way of Judicial Review in the BVI, the principles now laid down by Ellis J in that case establish a system of procedural safeguards for BVI persons which we hope will clarify a company and its organs rights when served with a notice under any domestic Mutual Legal Assistance statute. This is a victory for fundamental constitutional rights because not only does it assist directors in discharging their fiduciary duties and Registered Agents; it protects all BVI persons from arbitrary fishing expeditions from foreign powers and in so doing re-affirms the Rule of Law in the BVI. For more information on this important decision and its implications on the BVI industry contact Andrew ThorpJonathan Addo or see our complete case note.

Tax Transparency: A Two-Way Mirror

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