The British Virgin Islands (BVI), through global investment and trade, supports 2.2 million jobs worldwide, 150,000 of which are in the UK, and generates over $15bn (12bn) in tax revenues for governments around the world, according to research from Capital Economics
The report, Creating Value: BVI’s Global Contribution, found that the BVI mediates over $1.5 trillion of cross-border investment flows, the equivalent to 2% of global GDP.
The UK ($3.9bn), EU excluding the UK ($4.2bn) and China and Hong Kong ($2.1bn) are the largest beneficiaries of the BVIs generated tax revenues.
The investment mediated by BVI supports around 2.2 million jobs worldwide, with China (including Hong Kong) accounting for nearly two-fifths of them, and one-fifth in Europe.
Lorna Smith, OBE, Interim Executive Director of BVI Finance said: ‘Not only does the BVI enable cross border trade and investment, it both supports millions of jobs globally and generates substantial tax receipts for governments worldwide.
‘This brings tangible benefits to the lives of employees, voters, families and businesspeople around the world.’
BVI is one of the largest centres for the incorporation of companies, especially those created to facilitate cross-border trade and investment, and is home to a group of financial and professional services firms that form an ‘international business and finance centre’.
The report says ‘BVI is a sound and reliable centre which has worked harder than many bigger nations to meet international standards, and not some supposed tax haven.’
It goes on to say: ‘BVI is “tax neutral” and is not a centre for corporate profit shifting. Just because a company is incorporated in BVI does not stop it being liable for full taxation in other jurisdictions.
‘The territory has responded quickly and constructively to international developments seeking to improve transparency and clamp down on criminality, including tax evasion.’
The BVI are preparing to exchange financial account information automatically from September 2017, as part of the OECD’s Global Forum on tax transparency.
In December 2016 former Public Accounts Committee chair Margaret Hodge headed a group of MPs calling for UK overseas territories to be covered by the Criminal Finances Bill. The bill, which was enacted in April, includes a corporate offence of failure to prevent the facilitation of tax evasion.
Creating Value: BVI’s Global Contribution report is available here.
