The British Virgin Islands goverment has approved an extra $150,000 to improve its economic subtance legislation after paying a UK lawyer $400,000 in 2018 to draft the rules.
The decision was made during a special Cabinet meeting on December 16 last year. However, the report was only made public now, local news outlet BVINews reports.
It said: "Cabinet Decided to approve an additional $150,000 to cover additional work on Economic Substance legislation and related matters and approved an additional payment of $114,485.19 to Messrs. Michael Furness and Jack Rivett for additional work completed on the said legislation."
Queen's Counsel Michael Furness was hired in October 2018 to draft this piece of legislation for the territory's financial services industry as it needed to meet EU requirements to avoid being put on a blacklist.
At the time, Cabinet decided to waive the tendering process that was required to contract Furness. It then hired another attorney from the UK to help with the draft, "at a cost not exceeding $100,000".
Since then, they have been made to make multiple amendments to the legislation because of additional requirements from the EU.
In the EU's assessment, a range of factors are taken into account including tax transparency, fair taxation and a commitment to combat base erosion and profit shifting (BEPS).
Any jurisdiction judged by Brussels to be deficient within one or more of these areas is placed on either a blacklist or an intermediary ‘greylist'. While just 9 jurisdictions remain on the EU blacklist, 62 countries appear on the ‘greylist', including the BVI.
France recently blacklisted the British Virgin Islands as a non-cooperative territory in tax matters.
From November 2019