Common Reporting Standard – “late adopter” jurisdictions to exchange tax information from 2018
In recent years, the Organisation for Economic Cooperation and Development (OECD) has developed the Common Reporting Standard (CRS), introducing the automatic exchange of tax and financial information which more than 100 countries have agreed to implement.
Financial institutions in participating jurisdictions must collect information on reportable account holders and share it with local tax authorities. This information is then exchanged with other CRS-participating jurisdictions. Banks, custodians, certain insurance companies and investment funds are all defined as financial institutions under CRS. However, many other entities, including trusts and private investment companies, will also be defined as financial institutions if they meet certain criteria.
The CRS is being implemented in two stages. The 49 countries in the first group were required to submit information for 2016. These “early adopter” countries are in the process now of exchanging the information received with other participating jurisdictions.
Fifty-three jurisdictions are in the second group of adopters, and many of these have already enacted local legislation implementing CRS. Financial institutions in these jurisdictions must complete a due diligence review of account holders, and typically will require account holders to self-certify their CRS classification. In certain cases, account holders will also have to disclose controlling person information in self-certification forms. Reportable information will need to be filed during 2018 in regard to the 2017 reportable period.
These CRS “late adopter” jurisdictions are: Andorra, Antigua and Barbuda, Aruba, Australia, Austria, Azerbaijan, The Bahamas, Bahrain, Barbados, Belize, Brazil, Brunei, Canada, Chile, China, Cook Islands, Costa Rica, Curaçao, Darussalam, Dominica, Ghana, Greenland, Grenada, Hong Kong (China), Indonesia, Israel, Japan, Kuwait, Lebanon, Macao (China), Malaysia, Marshall Islands, Mauritius, Monaco, Nauru, New Zealand, Niue, Pakistan, Panama, Qatar, Russia, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, Saudi Arabia, Singapore, Sint Maarten, Switzerland, Trinidad and Tobago, Turkey, United Arab Emirates, Uruguay and Vanuatu.
Multinational groups should review the CRS status of entities resident in the second group of jurisdictions, to identify if any of them are financial institutions for the purposes of CRS. Non-financial groups should also determine the CRS status of entities, as the classification will likely need to be disclosed in self-certification forms to banks located in CRS jurisdictions.
The Citco Group of Companies has expert teams that can assist with CRS compliance. We provide classification, completion of self-certification forms, CRS due diligence and reporting services for entities classified as financial institutions in a wide array of jurisdictions.