Automatic exchange of information—the Common Reporting Standard: a summary
Produced in partnership with Ali Kazimi and Chris Orchard of Hansuke Consulting Limited
Automatic exchange of information—the Common Reporting Standard: a summary

The following Tax guidance note Produced in partnership with Ali Kazimi and Chris Orchard of Hansuke Consulting Limited provides comprehensive and up to date legal information covering:

  • Automatic exchange of information—the Common Reporting Standard: a summary
  • US FATCA
  • Global Common Reporting Standard
  • CRS in the EU
  • CRS in the EEA
  • Automatic exchange of information in the British Crown Dependencies and Overseas Territories
  • Scope and implementation of CRS
  • Key differences from FATCA
  • Reportable persons
  • Client onboarding
  • more

The Common Reporting Standard (CRS) is a global standard under which participating jurisdictions agree to exchange information about financial accounts held by individuals and entities in reporting financial institutions (FI) in the reporting jurisdiction that relate to account holders resident in the receiving jurisdiction. The regulatory requirements are contained in The International Tax Compliance Regulations 2015, SI 2015/878 (the UK Automatic Exchange Regs).

The introduction of the Common Reporting Standard (CRS) significantly added to the compliance burden on all Financial Institutions (FI).

FIs for these purposes include:

  1. custodial institutions

  2. depository institutions

  3. investment entities, and

  4. specified insurance companies

The definition is drawn intentionally wide and will cover not only banks but also other FIs such as brokers and certain collective investment vehicles (CIV).

However, given that the regime covers almost all of the major global financial centres, the information that is expected from the operation of the CRS is expected to be invaluable to revenue authorities in their fight against tax evasion.

Given that the focus of the CRS is on the tax residency of account holders, FIs will need to develop procedures to ensure:

  1. the proper classification of their existing and prospective customers

  2. functionality to detect possible changes to customers’ residency status, and

  3. follow-up validations to mitigate the risk of information being passed to the incorrect tax authority

The CRS sits as part of the