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Abstract: 

Offshore financial centers (OFCs) are commonly labelled “tax havens,” due to the misconception that they are used solely to avoid or evade tax. Two OFCs, the British Virgin Islands (BVI) and Cyprus, have been under particular attack recently. In September 2013 the G20 passed a communique in which the world’s leaders committed to cracking down on OFCs like the BVI and Cyprus through the automatic exchange of information on tax matters and by following the U.S. lead in supporting laws to penalize financial institutions in OFCs that do not disclose the identity of foreign individuals in G20 jurisdictions (and elsewhere) who hold accounts with these banks. This article aims to debunk recently pronounced myths about OFCs being simply tax havens, with particular focus on the BVI (which remains the leading center for the incorporation of offshore companies) and Cyprus (which has an unparalleled network of double taxation treaties).

Keywords: British Virgin Islands, Cyprus, offshore finance, offshore law, tax treaties

Affiliations:  1: Victoria Law School.