OECD backs new Economic Substance Regimes
A number of jurisdictions where PraxisIFM provides services have introduced Economic Substance legislation following recommendations from the European Union and the Organisation for Economic Co-operation and Development (OECD).
We are pleased to report the OECD forum on Harmful Tax Practices has reviewed the tax practices of those jurisdictions and confirmed they are 'not harmful' and the legal frameworks meet all aspects of global substance requirements.
The relevant jurisdictions where PraxisIFM currently has fully serviced offices are the British Virgin Islands (BVI) Guernsey the Isle of Man and Jersey.
Now that the legislation has been implemented and the relevant authorities have confirmed it is sufficient it is important it is followed correctly. All in-scope entities must demonstrate substance compliance. In each jurisdiction there are slightly different interpretations of what relevant activities are and what levels of substance are required. It is therefore important that you contact your adviser in the relevant jurisdiction to ensure compliance.
Subject to the location and activities of your business you may also choose to establish substance in another jurisdiction. We have seen a number of clients enquire about establishing substance in Hong Kong which is something we can assist with.
Below are links to specific notes on substance in the relevant jurisdictions:
BVIGuernseyIsle of ManJersey