Introduction and background to the CRS
The CRS is the global standard developed by the OECD for the automatic exchange of financial account information between participating jurisdictions for tax purposes. Under CRS, jurisdictions are required to obtain financial account information from their FIs and exchange this information on an automatic annual basis with partner jurisdictions.
The BVI committed to the early adoption of the CRS in 2014 and implemented the regime under the Mutual Legal Assistance (Tax Matters) Act, 2003 (as amended) via the amendment made to the Act in 2015 (the MLA). CRS has been effective in the BVI since 1 January 2016, with minor changes made by the 2018 amendment and 2022 amendment. The ITA is designated as the competent authority responsible for administering the CRS regime in the BVI and receives CRS information from BVI Reporting FIs (RFIs) through the BVIFARs portal before exchanging that information with participating jurisdictions that satisfy the OECD's confidentiality and data safeguards requirements.
The direct link for BVIFARs is:
https://bvifars.bviita.vg/.
Following the OECD's publication of amendments to the CRS in June 2023, the BVI government amended the MLA on 5 March 2026 and the ITA issued updated Guidance Notes on 21 April 2026. The amendments to the MLA and the Guidance Notes are deemed to be effective from 1 January 2026 and implement the OECD's updated CRS, together with a number of BVI-specific administrative and compliance changes.
Current obligations
A BVI entity that is a FI for CRS purposes must register with the ITA through the BVIFARs portal.
A FI means any of the following:
• a Custodial Institution, which is an entity that holds financial assets on behalf of clients as a substantial part of its business. This generally includes custodians, depositaries and other businesses that safeguard assets for others.
• a Depository Institution, which is an entity that accepts deposits in the ordinary course of a banking or similar business, such as a bank or savings institution.
• an Investment Entity, which is an entity whose business consists of trading in financial instruments, managing investment portfolios and investment funds, or otherwise investing, administering or managing financial assets or money on behalf of customers. This also includes certain entities managed by another FI.
• a Specified Insurance Company, which is an insurance company (or its holding company) that issues, or is obligated to make payments with respect to, cash value insurance contracts or annuity contracts.
Where the entity is an RFI, its obligations include:
• maintaining written CRS policies and procedures;
• carrying out due diligence in accordance with the CRS;
• obtaining and maintaining valid self-certifications from investors or customers where required;
• filing an annual CRS return (or nil return where applicable);
• completing the CRS Additional Information Form; and
• maintaining appropriate records to demonstrate ongoing compliance.
Background to the updates
Following its review of the CRS, the OECD published amendments in June 2023 (CRS 2.0) aimed at strengthening the operation of the CRS, improving due diligence and reporting outcomes and addressing developments in the digital economy, including crypto-assets.
The MLA amendments and the ITA's updated Guidance Notes implement CRS 2.0 within the BVI framework.
CRS 2.0 changes
Inclusion of new digital products
The definition of 'Financial Accounts' has been expanded to include the following new defined terms:
• Specified Electronic Money Product, which covers digital representations of a single fiat currency that are issued on receipt of funds for the purposes of making payment transactions. They are redeemable at par for the same fiat currency upon request; and
• Central Bank Digital Currency or CBDC, which is any official currency of a jurisdiction, issued in digital form by a central bank.
Definition of Financial Assets expanded and relationship with CARF
The definition of Financial Assets has been updated to include crypto-assets held in custody, derivatives and other indirect crypto-assets investments. This is intended to close any potential reporting gaps between the CRS and the CARF – which will apply to crypto-assets, once implemented.
The Guidance Notes confirm the ITA's intention to implement the CARF during 2027/ 2028.
Due diligence enhancements
The CRS due diligence procedures have been strengthened, requiring FIs to validate self-certifications for both account holders and controlling person(s).
RFI expansion
The updated Guidance Notes expand the definition of Depository Institution to include certain electronic money providers that were not previously within scope of the CRS.
The definition of Depository Accounts now extends to accounts holding specified electronic money products and CBDCs for customers, whether held in a centralised or decentralised manner.
Non-RFI clarification
The Guidance Notes clarify that a central bank will not qualify as a Non-RFI where it holds CBDCs on behalf of non-financial entities or individuals.
Central banks currently relying upon Non-RFI status should review whether they continue to satisfy the relevant exemption.
Concept of Resident in the Virgin Islands enshrined in the MLA
The MLA has been amended to include a statutory definition of when a FI is Resident in the Virgin Islands. Previously, this was only set out in the Guidance Notes.
A FI will generally be resident in the BVI where it:
• is incorporated or established in the BVI;
• has its place of effective management in the BVI; or
is subject to financial supervision in the BVI, including licensing, regulation or supervision by the BVI Financial Services Commission.
Registration requirements
The updated Guidance Notes introduce additional registration requirements for BVI entities that qualify as FIs but are tax resident in another jurisdiction.
Rather than notifying the ITA by email, those entities are now required to register through the BVIFARs portal, disclose their jurisdiction of tax residence and provide evidence that they are satisfying their CRS reporting obligations in that jurisdiction.
Where the ITA is satisfied that the entity is meeting its reporting obligations elsewhere, duplicate reporting in the BVI will not be required, although spot checks may still be undertaken by the ITA to ensure compliance.
Appointment of Secondary Users
The Guidance Notes clarify that Secondary Users may now be appointed directly by the Primary Users through the BVIFARs portal.
This replaces the previous wording that the Secondary User was to be communicated to the ITA and aligns the Guidance Notes with the practical operation of the portal.
Deregistration
The Guidance Notes introduce further clarification regarding deregistration requests.
Entities seeking deregistration because they no longer satisfy the definition of a FI should clearly explain its change in circumstances. The Guidance Notes also note that deregistration requests are likely to take longer than 60 days depending on the nature of the request.
The Guidance Notes further address the interaction between deregistration and the amendments to the BVI Business Companies Act relating to strike-off and dissolution, confirming that entities intending to allow themselves to be struck off should ensure that all outstanding CRS filings are submitted within the applicable statutory period.
CRS additional information form
The Guidance Notes have been updated to reflect the existing requirement for all FIs, including RFIs and Non-RFIs, to complete the CRS Additional Information Form through the BVIFARs portal within 9 months following the end of the relevant financial year.
The information collected through the form supports the ITA's compliance programme and may be used to risk-rate FIs for the purposes of desk-based reviews and onsite inspections.
Practical considerations
RFIs should review their existing CRS compliance frameworks to ensure they remain consistent with the updated Guidance Notes.
In particular, FIs should consider whether they need to update their classification analyses, written policies and procedures, onboarding documentation, due diligence processes and reporting procedures to reflect the changes introduced by CRS 2.0 and the revised administrative requirements. FIs with activities involving electronic money products or crypto-assets should also assess whether those activities fall within the expanded CRS framework and prepare for the future implementation of CARF.
Contacts
We have a dedicated global Regulatory & Risk Advisory practice group of regulatory lawyers that can offer legal and practical advice, documentation and training in connection with all FATCA, CRS and CARF aspects. Through our affiliate, WPS, we are also committed to providing FATCA, CRS and CARF solutions that will enable all clients subject to the regime to satisfy the necessary requirements, including the new CRS 2.0 changes.
For further information please speak with your usual Walkers contact.
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