The Vanuatu Customs and Inland Revenue Department introduced a new concept of “Tax Identification Numbers” (TIN) as part of the recent Vanuatu Tax Administration Act (TAA 37). The TIN is a must have for easy automatic exchange of information under the Common Reporting Standard (CRS) system. Investors may come across this requirement when opening or managing their bank accounts.
A CRS signatory member, Vanuatu failed to fully comply with the requirements as it didn’t have a TIN system in place. This shortcoming could affect Vanuatu Citizenship holders willing to open an account in other countries where TIN provision is mandatory.
What could this mean to Vanuatu’s Citizenship by Investment participants? For the Vanuatu Development Support Programme (VDSP) and Vanuatu Contribution Program (VCP) members, the implementation of TIN seems a tangible benefit. Also, no changes to the existing tax rates are implied in the Act – the country sticks to its largely tax-free policy.
By improving the tax framework and reporting aspects, Vanuatu attempts to ensure better compliance with the stringent EU norms. The European Union continues to pressure tax-free jurisdictions whereas Vanuatu strives to boost its tax policies without jeopardising independence in defining its tax regime.
Another question is how the post-Brexit UK will interact with the Commonwealth states. The Vanuatu government hopes the UK will support its economic base as well as trade and investment initiatives.
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