An individual who qualifies as a bona fide resident of the U.S. Virgin Islands (or who files a joint U.S. return with a U.S. citizen or resident with U.S. Virgin Islands income) will generally have no U.S. tax liability so long as the taxpayer reports all income from all sources on the return filed with the U.S. Virgin ...

The tax obligations for U.S. citizens in the Virgin Islands depend on whether they are in the U.S. Virgin Islands (USVI) or the British Virgin Islands (BVI). In the USVI, citizens are generally subject to a "Mirror Code" system; they file their tax returns with the Virgin Islands Bureau of Internal Revenue (BIR) rather than the IRS, but the rates and rules are identical to the U.S. federal code. If you are a bona fide resident of the USVI, your tax liability to the U.S. government is typically satisfied by paying the USVI BIR. In the BVI, U.S. citizens are still subject to U.S. taxation on their worldwide income. While the BVI itself has no income tax, capital gains tax, or VAT, U.S. expats must still file IRS Form 1040. They can often use the Foreign Earned Income Exclusion or Foreign Tax Credits to reduce their U.S. liability, but they must still report foreign bank accounts via FBAR (FinCEN Form 114) if their total balances exceed $10,000 at any point during the year.