International Tax Co-operation (Economic Substance) (Amendment of Schedule) Regulations, 2021 (SL48 of 2021)

International Tax Co-operation (Economic Substance) Act (2021 Revision) INTERNATIONAL TAX CO-OPERATION (ECONOMIC SUBSTANCE) (AMENDMENT OF SCHEDULE) REGULATIONS, 2021

PUBLISHING DETAILS

Regulation 1

International Tax Co-operation (Economic Substance) Act (2021 Revision) INTERNATIONAL TAX CO-OPERATION (ECONOMIC SUBSTANCE) (AMENDMENT OF In exercise of the powers conferred by section 15 of the International Tax Co-operation (Economic Substance) Act (2021 Revision), the Cabinet makes the following Regulations — Citation and commencement These Regulations may be cited as the International Tax Co-operation (Economic Substance) (Amendment of Schedule) Regulations, 2021. These Regulations come into force on 30th June, 2021. Amendment of the Schedule to the International Tax Co-operation (Economic Substance) Act (2021 Revision) - construction of words and expressions The International Tax Co-operation (Economic Substance) Act (2021 Revision) is amended in the Schedule as follows — (a) by renumbering paragraph 1 as paragraph 1(1); (b) in paragraph 1(1), as renumbered, as follows —

(i) by deleting the definition of the words “carrying on business in the Islands” and substituting the following definition — “ “carrying on business in the Islands” has the same meaning as “carry on business in the Islands” in section 2(2) of the Local Companies (Control) Act (2019 Revision) except that references in that definition to “company” and “exempted company” shall be interpreted to include “partnership”;”; (ii) by deleting the definition of the words “pure equity holding company” and substituting the following definition — “ “pure equity holding company” means an entity that only holds equity participations in other entities and only earns dividends and capital gains;”; (iii) in the definition of the words “relevant entity”, by inserting after paragraph (a) the following paragraphs — “(aa) a partnership as defined under section 3 of the Partnership Act (2013 Revision), except where the partnership is a local partnership; (ab) an exempted limited partnership as defined under section 2 of the Exempted Limited Partnership Act (2021 (ac) a foreign limited partnership registered under section 42 of the Exempted Limited Partnership Act (2021 (iv) by deleting the definition of the words “ultimate beneficial owner” and substituting the following definition — “ “ultimate beneficial owner”— (a) in relation to a company that is incorporated or registered under the Companies Act (2021 Revision), has the same meaning as “beneficial owner” in section 244 of that Act; (b) in relation to a limited liability company that is registered under the Limited Liability Companies Act (2021 Revision), has the same meaning as “beneficial owner” in section 70 of that Act; in relation to a partnership as defined under section 3 of the Partnership Act (2013 Revision), has the same meaning as “beneficial owner” in section 51 of the Limited Liability Partnership Act (2021 Revision) except that references to “limited liability partnership” in sections 51 and 54 of the Limited Liability Partnership Act (2021 Revision) shall be interpreted to mean a reference to “partnership”;

(d) in relation to an exempted limited partnership as defined under section 2 of the Exempted Limited Partnership Act (2021 Revision), has the same meaning as “beneficial owner” in section 51 of the Limited Liability Partnership Act (2021 except that references to “limited liability partnership” in sections 51 and 54 of the Limited Liability Partnership Act (2021 Revision) shall be interpreted to mean a reference to “exempted limited partnership”; (e) in relation to a foreign limited partnership registered under section 42 of the Exempted Limited Partnership Act (2021 Revision,) has the same meaning as “beneficial owner” in section 51 of the Limited Liability Partnership Act (2021 except that references to “limited liability partnership” in sections 51 and 54 of the Limited Liability Partnership Act (2021 Revision) shall be interpreted to mean a reference to “foreign limited partnership”; or (f) in relation to a limited liability partnership that is registered under the Limited Liability Partnership Act (2021 Revision), has the same meaning as “beneficial owner” in section 51 of that Act;”; and (v) by inserting in the appropriate alphabetical sequence, the following definitions — “ “local partnership” means a partnership as defined under section 3 of the Partnership Act (2013 Revision) that is not part of an MNE Group and — (a) that is only carrying on business in the Islands and is empowered by its partnership agreement to carry on business in the Islands; and (b) that — (i) is licensed under the Trade and Business Licensing Act (2021 Revision) and, at the relevant time, is carrying on such business in accordance with the terms and conditions imposed in such licence and not otherwise; (ii) is operating under a franchise granted by the government; or (iii) complies with section 3(a) of the Trade and Business Licensing Act (2021 Revision); and

“Registrar”— (a) in relation to a partnership means the Registrar of Limited Partnerships under section 48 of the Partnership Act (2013 Revision); (b) in relation to an exempted limited partnership means the Registrar of Exempted Limited Partnerships under section 8 of the Exempted Limited Partnership Act (2021 Revision); or in relation to a foreign limited partnership registered under section 42 of the Exempted Limited Partnership Act (2021 Revision), means the Registrar of Exempted Limited Partnerships under section 8 of the Exempted Limited Partnership Act (2021 Revision)”; and by inserting after subparagraph (1) the following subparagraph — “(2) Notwithstanding sections 7(10) and 10(5) of the Act, a partnership under the Partnership Act (2013 Revision), an exempted limited partnership under section 2 of the Exempted Limited Partnership Act (2021 Revision) or a foreign limited partnership under section 42 of the Exempted Limited Partnership Act (2021 Revision) is, from the commencement of the International Tax Co-operation (Economic Substance) (Amendment of Schedule) Regulations, 2021, an entity for the purposes of sections 7 and 10 of the Act.”.

Made in Cabinet the 29th day of June, 2021. Kim Bullings Clerk of the Cabinet