Definitive Guide to Hiring in United States Virgin Islands

Income Tax in United States Virgin Islands

• The US Virgin Islands income tax system mirrors the US income tax system.
• Bona fide residents of the US Virgin Islands are taxed on their worldwide income.
• The US Virgin Islands tax liability of other US citizens or residents with US Virgin Islands-source income is based on the ratio of their adjusted gross income derived from US Virgin Islands sources to their adjusted gross income worldwide.
• Income tax provisions in the US Virgin Islands governing the computation of taxable income, including employment and business income, directors’ fees, investment income, income from certain foreign corporations and capital gains, as well as the availability of deductible expenses and personal deductions and allowances, are the same as those in the United States.
• All USVI citizens and residents, including resident aliens and citizens who reside outside the USVI, pay federal tax on their worldwide income, with credits for foreign income taxes (subject to certain limitations).
• Nonresident aliens are taxed only on ECI and USVI-source non-ECI.
• Income tax rates for 2023 are given below: -

Social Security in United States Virgin Islands

Specialty occupations—H-1B

• The H-1B category covers foreign nationals employed in specialty occupations that require a theoretical and practical application of highly specialized knowledge, as well as a bachelor’s degree or the equivalent in the field.
• Before applying for an H-1B visa, an employer must file a Labor Condition Application (LCA) with the Department of Labor (DOL) and certify that, among other things, the foreign national will be paid at least the prevailing wage for the proffered position.
• On 15 March 2019, the DOL issued policy guidance regarding LCA posting requirements.
• A prospective employer must also provide notice of filing the application by posting a hard copy notice, electronic notification or, when applicable, notification to the company’s bargaining representative.
• If posting by hard copy notice, the employer must post notice of filing the application in two conspicuous locations at the employment site for at least 10 consecutive business days.
• If the employer meets the requirements, the holder of the H-1B status is entitled to a maximum six-year stay in the United States.
• In specified circumstances, extensions beyond the six-year limit may be available.
• Each year, only 65,000 H-1Bs are made available.
• In addition, regulations allow a further 20,000 H-1Bs to be issued to persons having a master’s or higher degree from qualifying US post-secondary institutions.
• These requirements apply to both initial and renewal petitions. Prior to issuing this policy guidance, the USCIS generally permitted petitioning employers to provide general statements regarding the dates and locations of an H-1B worker’s proposed or possible employment at external client locations.
• The current policy guidance specifically overturns the prior guidance and institutes a requirement for a specific, detailed itinerary corroborated by contracts covering these employees’ work.
• On 19 November 2018, a new ETA Form 9035, Labor Condition Application (LCA), was implemented by the DOL.
• The new LCA form requests that the employer discloses the following:
• Estimated number of workers that will perform work at the intended place of employment
• Whether the worker subject to the LCA will be placed with a secondary employer at the place of employment
• If the worker is placed with a secondary employer, the legal business name of the secondary employer
• These revisions were made to improve transparency about the number of H-1B workers being sent to worksites, the locations at which H-1B workers will be placed and the entities with which H-1B workers will be placed.

Intracompany transferees—L-1

• The L-1 visa allows foreign companies with affiliated operations in the United States to transfer needed personnel to their US facilities.
• L-1 visas may be issued to foreign nationals who are employed abroad in executive or managerial positions, or who hold positions involving specialized knowledge in the company’s procedures, processes, services and/or products.
• On 15 November 2018, the USCIS issued a Policy Memorandum (PM) clarifying the requirement that the qualifying organization must have employed the principal L-1 beneficiary at the related foreign entity abroad for at least one continuous year during the three years preceding the time of petition filing.
• The PM explains the following:
• The L-1 beneficiary must be physically outside of the United States during the required one continuous year of employment.
• The petitioner and the beneficiary must meet all requirements, including the one year of foreign employment, at the time the petitioner files the initial L-1 petition.
• Specifically, the PM states that while a qualifying foreign entity employs a beneficiary abroad, brief trips to the United States for business or pleasure in B-1 or B-2 status tolls the one continuous year of employment abroad.
• If the beneficiary made brief trips to the United States that year for a total of 60 days, the beneficiary would need to accrue at least an additional 60 days of qualifying employment to meet the one-year foreign employment requirement.
• On arrival in the United States, the beneficiary must assume an executive, managerial or specialized knowledge position with the US affiliate, parent, subsidiary or branch office.
• Managers and executives may be issued and retain L-1A status for up to seven years;
• L-1B specialized-knowledge personnel may remain in the United States in that status for up to five years.
• For startup operations, L-1 visas are granted initially for a one year “new office” period.
• For visa extensions, startup companies must prove at the end of the year that they are “doing business” in the United States and have made progress toward becoming viable operating entities that need the services of managers, executives or personnel with specialized knowledge.
• If, at the end of the first year, the startup company is unable to prove that this progress has been made, it may be possible for the individual to receive an extension of an additional year to continue to grow the business.
• L-1B specialized knowledge visa holders may not work primarily at a worksite other than that of the petitioning employer if either of the following conditions will apply:
• The work to be carried out will be controlled by a different employer.
• The off-site arrangement will provide labor for hire, rather than service related to the specialized knowledge of the petitioning employer.

Extraordinary ability—O-1

• The O-1 visa category is for persons of extraordinary ability in the sciences, arts, education, business or athletics.
• Separate tests for demonstrating extraordinary ability exist for the following categories of individuals:
• Foreign nationals in the motion picture and television industries
• Other foreign nationals Most foreign nationals must prove their claim of extraordinary ability by providing evidence of sustained national or international acclaim.
• They may enter the United States only to work in their fields, and US immigration authorities must determine that their entry substantially benefits the United States.
• O-1 petitions are submitted to the USCIS for adjudication, and in some instances must be accompanied by proof of consultation with appropriate US labor unions (particularly those representing individuals in the arts, entertainment or athletics).

Payments And Invoicing

• In general, the tax year for individuals in the US Virgin Islands is the calendar year.
• The US Virgin Islands system of tax administration is based on the principle of self-assessment.
• In general, taxpayers must file returns with the Virgin Islands Bureau of Internal Revenue or the IRS, depending on their residence status and the source of their income.
• Taxes are generally collected by employer withholding on wages and salaries and by individual payment of estimated taxes on income not subject to withholding.
• Normally, tax due in excess of amounts withheld and payments of estimated tax must be paid with the return when filed.
• Taxpayers may claim refunds of overpayments of tax on annual returns.
• Substantial penalties and interest are usually imposed on taxpayers if returns are not filed on time or if tax payments, including estimated payments, are late.
• Tax returns may be selected for audit at a later date by the Bureau of Internal Revenue.
• Failure to adequately support amounts claimed as deductions on a return may result in the disallowance of deductions and in a greater tax liability, on which interest and penalties are levied from the original due date.
• In general, taxpayers must maintain supporting documentation for at least three years after a return is filed.