One of the results of the mirror system is that a corporation incorporated in the United States, along with a corporation incorporated elsewhere outside of the USVI, is considered foreign for USVI tax purposes. This is done on IRS form 8689. Real Property Taxes. Gross Receipts Taxes. Excise Taxes and Customs Duties Articles imported into the U.S. Virgin Islands for use or resale in a trade or business are subject to an excise tax.
Alcoholic beverages are subject to a flat rate based on volume.
Certain other goods are subject to a lower rate of excise tax, and most tourist items, such as jewelry, watches, crystal, artwork, electronic goods, and leather goods, are exempt entirely. There are three types of entities that can be established in the USVI which are either fully or partially exempt from USVI taxes and U.S. federal income taxes. They also enjoy a special customs duty rate of one percent. These companies are generally not subject to U.S. federal income taxes on their USVI operations. Except in the case of certain captive insurance companies, U.S. and USVI citizens, residents, and companies are prohibited from owning, directly or indirectly, ten percent or more of the stock of a USVI exempt company.