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Common Reporting Standard Introduction

Updated:2018-1-12 11:32:14    Source:www.tannet-group.comViews:750

Common Reporting Standard (CRS) is an information standard for the automatic exchange of tax and financial information on a global level, which the Organization for Economic Co-operation and Development (OECD) developed in 2014. Its purpose is to combat tax evasion. The idea was based on the USA Foreign Account Tax Compliance Act (FATCA) implementation agreements and its legal basis is the Convention on Mutual Administrative Assistance in Tax Matters.

As of 2016, 83 countries had signed an agreement to implement it. First reporting is planned September 2017. The CRS has been criticized for leaving too many loopholes open, for how developing countries were not considered and involved and that non-reciprocity agreements were catering to tax havens.

Participants of CRS
The European Union adopted CRS on January 1, 2016 after amending the part on administrative cooperation re taxation. First reporting was planned for September 2017.

As of June 2017, the following countries committed to start reporting in 2017:
Anguilla, Argentina, Barbados, Belgium, Bermuda, British Virgin Islands, Bulgaria, Cayman Islands, Colombia, Croatia, Curaçao, Cyprus, Czech Republic, Denmark, Estonia, Faroe Islands, Finland, France, Germany, Gibraltar, Greece, Greenland, Guernsey, Hungary, Iceland, India, Ireland, Isle of Man, Italy, Jersey, Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mexico, Montserrat, Netherlands, Niue, Norway, Poland, Portugal, Romania, San Marino, Seychelles, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Trinidad and Tobago, Turks and Caicos Islands, United Kingdom

Starting to report in 2018:
Albania, Andorra, Antigua and Barbuda, Aruba, Australia, Austria, The Bahamas, Bahrain, Belize, Brazil, Brunei Darussalam, Canada, Chile, China, Cook Islands, Costa Rica, Dominica, Ghana, Grenada, Hong Kong (China), Indonesia, Israel, Japan, Kuwait, Lebanon, Marshall Islands, Macao (China), Malaysia, Mauritius, Monaco, Nauru, New Zealand, Pakistan, Panama, Qatar, Russia, Saint Kitts and Nevis, Samoa, Saint Lucia, Saint Vincent and the Grenadines, Saudi Arabia, Singapore, Sint Maarten, Switzerland, Turkey, United Arab Emirates, Uruguay, Vanuatu

Differences Between CRS and FATCA
Unlike FATCA, CRS does not impose a withholding requirement. Instead, CRS enforcement will be handled by each of the jurisdictions adopting CRS that will be required to establish an audit and penalty regime for lack of compliance with the rules.

One important challenge associated with CRS is that even though the standard intends to impose uniform requirements across the jurisdictions adopting this new global information reporting regime, the reality is that each jurisdiction is entitled to exercise different options and expand the minimum requirements established in the standard. In addition, the residency definitions and data privacy and protection rules can vary from country to country. As a result, stakeholders will need to monitor the rules, guidance, approach, reporting forms, etc., that each jurisdiction releases.

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