l CRS has been implemented in European Union through Administrative Cooperation Directive (Directive 2014/107 / EU), known as “DAC 2”. Meanwhile, the relationship in the tax field with non-EU countries is governed by multilateral agreements called "Competent Authority Agreement".
CRS requires financial institutions to report financial accounts maintained, directly or indirectly, by account holders who are tax residents in a CRS jurisdiction.
The CRS Regulation applies to any Financial institution located in a CRS jurisdiction and requires said Financial Institutions to identify clients who are residents in another jurisdiction that has signed the CRS agreement. It applies both individuals and entities.
In order to identify natural or legal persons residing in another jurisdiction that has accepted the CRS standard, Financial Institutions are required to obtain, through different forms (Entity Tax Residency Self-Certification Form, Individual Tax Residency Self-Certification Form or 'Controlling Person Tax Residency Self-Certification Form) the data relating to the residence of the holders, whether they are individuals, companies or persons who control entities. These forms must include the country (s) of tax residence and the tax identification number (s) (TIN).
To help protect the integrity of tax systems, governments around the world are introducing a new requirement that requires financial institutions to collect certain information. This is due to the implantation of the Common Reporting Standard (the CRS).
For pre-existing customers, the bank will contact all those subject to CRS review to obtain a self-certification form in which they determine their residence for tax purposes and provide their tax identification number. Without a self-certificationBanks are legally obligated to consider the account holder as a person who must report. As a consequence, the information of the undocumented account holder will be reported to the relevant tax authorities.
Physical People: name, address, country of residence, TIN (tax identification number or equivalent in each jurisdiction), date and place of birth.
Legal persons: name, address, country of residence, TIN of the entity. And of the Controlling Person, name, address, country of residence, TIN, date and place of birth.
Account balance at end of period
For escrow accounts: gross interest, gross dividends, and any other income generated by the account's assets.
For deposit accounts: interest gross or credited.
For other accounts: gross amounts paid or credited.
address (mail, residence, mailbox or care of) in a CRS jurisdiction;
Phone number from a CRS jurisdiction that is the only phone number;
Notary document that certifies that the bank account is owned by a person with an address in one of the CRS jurisdictions (with its corresponding mail, residence, mailbox ...):
This means that clients have to sign a self-certification form to confirm their CRS tax residency (s).
provide the following information to the tax authorities of the country where the financial institution is located if it has embraced the CRS standard:
The first report will occur in 2017 and will cover 2016.