BUREAU RELEASES OFFICIAL GUIDANCE ON INTEREST PAYMENTS MADE TO NON-RESIDENT ALIENS

Joel A. Lee, CPA, Director of the Virgin Islands Bureau of Internal Revenue, has issued official guidance addressing the withholding and reporting requirements for financial institutions as it relates to the payment of interest to non-resident aliens. The official guidance can be found on the Bureau’s website at www.bir.vi.gov and can be cited as Revenue Ruling 2025-1223-1.

The purpose of the Revenue Ruling is to provide clarification on the mirrored application of Treasury Regulation section 1.6049-8(a). The Revenue Ruling is applicable to all banks and financial institutions doing business in the Virgin Islands. It serves to remind the payors that any interest paid to non-resident aliens should be reported to the Bureau using Form 1042-S. If back up withholding is required, the withheld payments should be paid to the Bureau using Form 1042-S.

Questions concerning this Revenue Ruling can be directed to the Office of Chief Counsel at (340) 715-1040.