| Further to our April Issue of TechNews on “British Virgin Islands – Economic Substance Test”, the British Virgin Islands (“BVI”) International Tax Authority (“ITA”) issued a draft Economic Substance Code on 23 April 2019 (“Draft Code”). Education sessions were conducted by the ITA in the BVI, and for private sectors in Hong Kong SAR and London. The Draft Code sets out the effects of the Economic Substance (Companies and Limited Partnerships) Act 2018 (as amended) (“ESA”) and provides guidance for legal entities which may be subject to economic substance requirements to assist with compliance under the ESA. Although the Draft Code has not been finalized, the ITA has indicated in the Draft Code that it will take a pragmatic and commercially realistic approach to the interpretation of the ESA. While we await finalisation of the Draft Code, it is worth highlighting the important points from the Draft Code in this TechNews. |