The Tax Information Exchange Agreement (Taxes on Income) (Virgin Islands) Order 2005

(1) For the purposes of this Agreement, “interest payment” means—

(a) interest paid, or credited to an account, relating to debt claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor’s profits, and, in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures; penalty charges for late payment shall not be regarded as interest payment;

(b) interest accrued or capitalised at the sale, refund or redemption of the debt claims referred to in sub-paragraph (a);

(c) income deriving from interest payments either directly or through an entity referred to in Article 8(2) of this Agreement, distributed by—

(i) an UCITS authorised in accordance with Council Directive 85/611/EEC; or

(ii) an equivalent undertaking for collective investment established in the BVI;

(iii) entities which qualify for the option under Article 8(3) of this Agreement;

(iv) undertakings for collective investment established outside the territory to which the Treaty establishing the European Community applies by virtue of Article 299 thereof and outside the BVI; and

(d) income realised upon the sale, refund or redemption of shares or units in the following undertakings and entities, if they invest directly or indirectly, via other undertakings for collective investment or entities referred to below, more than 40% of their assets in debt claims as referred to in sub-paragraph (a)—

(i) an UCITS authorised in accordance with Council Directive 85/611/EEC; or

(ii) an equivalent undertaking for collective investment established in the BVI;

(iii) entities which qualify for the option under Article 8(3) of this Agreement;

(iv) undertakings for collective investment established outside the territory to which the Treaty establishing the European Community applies by virtue of Article 299 thereof and outside the BVI.

However, the contracting parties shall have the option of including income mentioned under paragraph (1)(d) of this Article in the definition of interest only to the extent that such income corresponds to gains directly or indirectly deriving from interest payments within the meaning of paragraph (1)(a) and (b) of this Article.