What is CRS?
The Common Reporting Standard (CRS) is the standard for the Automatic Exchange of Information (AEOI) developed by the Organisation for Economic Co-operation and Development (OECD). It is a new reporting and information-gathering requirement for financial institutions in participating countries, to help fight against tax evasion and protect the integrity of tax systems.
What is the main purpose of CRS?
The main purpose of the CRS is to combat the offshore tax evasion and to provide minimum set of standards and framework to increase efficiency and decrease cost associated with exchange of information. Local Financial Institutions report CRS specific information to their Competent Tax Authority, who in turn exchanges this information with the respective Competent Authorities of the Participating Jurisdictions with which they have an agreement in place.
Who is within the scope of CRS?
The CRS regulation generally applies to any Financial Institution (FI) located in a CRS participating jurisdiction and obliges those Financial Institutions to identify tax residency of account holders. CRS applies to both individuals and entities. An up to date list of the countries that have either signed or committed to adopt CRS can be found on the OECD’s site at the following link http://www.oecd.org/tax/transparency/AEOI-commitments.pdf. Cyprus Financial Institutions are required to identify reportable accounts based on the information collected (via a self-certification) and report them accordingly to the Cyprus tax authority. In turn, the Cyprus tax authority will exchange information with the tax authorities of Reportable Jurisdictions. (Note: the list of reportable jurisdictions will be released by the Cyprus tax authority.) Among other items, self-certification information includes the country(ies) of tax residence and the tax identification number(s).
Which jurisdictions have signed a MCAA for CRS?
As of December 2015, 96 jurisdictions have committed to the CRS (http://www.oecd.org/tax/transparency/AEOI-commitments.pdf), of which 56 have committed to be early adopters, 40 have committed to be late adopters. Additionally, 75jurisdictions have signed the CRS (http://www.oecd.org/ctp/exchange-of-taxinformation/MCAA-Signatories.pdf).
Who is reportable?
The CRS seeks to establish the tax residency of customers. Under the CRS, financial institutions are required to identify customers who are tax resident in foreign jurisdictions i.e. outside of the country where they hold their accounts and products, and report certain information to the national tax authority.
Where can I get more information regarding CRS from?
For further information please consult the OECD website at: http://www.oecd.org/ctp/exchange-of-tax-information/automatic-exchange-financial-accountinformation-common-reporting-standard.pdf. Argus is unable to comment on our account holders tax position and you may need to consider professional advice if you are not sure about your personal tax circumstances.