CRS - What is it?
The OECD introduced the Common Reporting Standard (“CRS”) to help combat tax evasion by individuals using accounts and structures in jurisdictions other than in the jurisdiction in which they are resident i.e. a FATCA for the rest of the world, which draws heavily on the approach taken to implementing FATCA (see our separate FATCA summary here). The CRS is multilateral in nature compared to FATCA and some US specific features of FATCA (such as a definition of “US Person”) are not relevant to the CRS. Within the CRS framework, FIs must report information for exchange between tax authorities in the signatory jurisdictions.
Who does it apply to?
The CRS applies in jurisdictions that have signed up to the CRS. Financial Institutions (“FIs”) in so-called CRS Participating Jurisdictions are subject to active obligations to comply with the requirements of the CRS.
What are the key requirements/ dates/ penalties?
Like FATCA, the CRS introduced a standard set of due diligence procedures pursuant to which FIs must identify Account Holders and Controlling Persons who are Account Holders of Financial Accounts which they maintain. Account Holders are reportable under CRS if they are resident in a CRS Participating Jurisdiction other than the CRS Participating Jurisdiction in which the Financial Institution is resident. The CRS is not backed by sanctions in the same way as FATCA, and CRS Participating Jurisdictions are responsible for enforcing CRS compliance at a domestic level.