Deciding to cease your tax residency in the British Virgin Islands (BVI) is a significant decision that involves several legal steps. This guide will take you through each step to ensure a smooth transition.
Step 1: Notify the BVI Authorities
The first step to ceasing your tax residency in the BVI is to formally notify the relevant BVI authorities. This includes informing the BVI Financial Services Commission and the BVI Inland Revenue Department. The notification should be in writing and must include your full name, address, and the date you intend to cease your residency.
Step 2: Settle Outstanding Taxes
Before you can cease your tax residency, you must ensure that all outstanding taxes are settled. This includes any unpaid income taxes, property taxes, and other local taxes. Obtain a tax clearance certificate from the BVI Inland Revenue Department to confirm that all your tax liabilities have been fulfilled.
Step 3: Close Local Bank Accounts
It is advisable to close any local bank accounts you hold in the BVI. This is to ensure that there are no financial ties that could imply continued residency. Notify your bank in writing of your intention to close the account, and ensure that all transactions are settled.
Step 4: Relinquish Local Properties
If you own property in the BVI, you will need to either sell or transfer ownership of these properties. Ensure that all property taxes are paid up to date before transferring ownership. Legal documentation will be required to complete this process.
Step 5: Deregister from Local Services
Ensure that you deregister from any local services such as healthcare, utilities, and social services. This includes notifying service providers of your departure and settling any outstanding bills. Obtain confirmation of deregistration where applicable.
Step 6: Obtain Proof of New Residency
To finalize the cessation of your BVI tax residency, you will need to provide proof of your new residency status. This could be a residency certificate, a utility bill, or a lease agreement from your new country of residence. Submit this proof to the BVI authorities along with your formal notification.
Step 7: Submit Final Tax Return
File a final tax return with the BVI Inland Revenue Department, covering the period up to the date you cease residency. Ensure that all income earned during this period is reported and that any remaining taxes are paid. Keep copies of all submitted documents for your records.
Legal References
- Income Tax Act, Cap 206
- BVI Business Companies Act, 2004
- Property Tax Act, Cap 207
- Financial Services Commission Act, 2001
- Inland Revenue Department Guidelines
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