These initiatives aim to improve global tax transparency and address emerging challenges in financial markets. The BVI will implement CRS 2.0 starting 1 January 2026, with reporting deadlines set for May 2027. Virgin Islands financial institutions will need to collect the new information during 2026 to be reported to the ITA by May 2027.

CARF implementation is scheduled for 2028.

• Inclusion of digital products: Financial accounts now encompass electronic money products and Central Bank Digital Currencies (CBDCs).
• Expanded definition of financial assets: Relevant crypto-assets, derivatives and indirect crypto-asset investments are now included.
• Due diligence: Strengthened procedures mandate validation of self-certifications for account holders and controlling persons.
• Clarified reporting entities: E-money providers and accounts holding CBDCs are now explicitly covered.
• Improved reporting quality: Updates include expanded reporting requirements, reliance on AML/KYC procedures and exceptional due diligence for cases lacking valid self-certifications.

The CRS, introduced in 2014, was designed to promote tax transparency for financial accounts held abroad. Over 100 jurisdictions have implemented the CRS, but evolving financial markets, including the rise of crypto-assets, necessitated a comprehensive review. This review, conducted by the OECD in collaboration with G20 countries, resulted in two major outcomes:

Crypto-Asset Reporting Framework (CARF): A global tax transparency framework for the automatic exchange of tax information on crypto-asset transactions. CARF addresses the unique challenges posed by crypto-assets, which often operate outside traditional financial systems, reducing tax administrations' visibility on tax relevant activities. CARF includes:

• Rules for domestic implementation, covering the scope of crypto-assets, reporting entities, transactions and due diligence procedures.
• A Multilateral Competent Authority Agreement for information exchange.
• An XML schema for standardised reporting and exchange of information between tax administrations.

Amendments to the CRS: Updates to include new financial assets, products and intermediaries, while avoiding duplicative reporting with CARF. Enhancements include:

• Detailed reporting requirements.
• Strengthened due diligence procedures.
• New categories for Non-Reporting Financial Institutions (e.g., genuine non-profit organisations) and Excluded Accounts (e.g., capital contribution accounts).
• Additional guidance to improve consistency in CRS application.

Financial institutions in the BVI must familiarise themselves with these changes to ensure compliance with the revised reporting standards.

For further details, the BVI ITA’s notice can be found here