The Virgin Islands Bureau of Internal Revenue (“BIR”) recently announced a 90 day gross receipts tax amnesty, which will expire on January 25, 2011. The amnesty was signed into law in October and allows businesses to file delinquent gross receipts tax returns with the BIR and pay any outstanding balances due without having to pay penalties and interest.
This amnesty could end up savings late or delinquent filers hundreds and perhaps thousands of dollars. Many businesses, when they begin operating in the Territory, are not aware of the gross receipts tax and filing requirements, assuming that they merely have to pay income taxes. However, the Virgin Islands imposes a gross receipts tax on total receipts from the conduct of business within the Virgin Islands. Businesses with yearly gross receipts of $225,000 or more pay a tax of 4% on all gross receipts and business with less than $225,000 pay a tax of 4% on all receipts in excess of $9,000 per month. Penalties for late payment are assessed at a rate of 5% per month, not to exceed a maximum of five months or 25%. Interest for late payments is incurred at a rate of 1% per month.