OECD Countries to Share Expat Bank Account Details

OECD Countries to Share Expat Bank Account Details

From January 1, 2016, information about individuals’ bank accounts, investment accounts & trusts will be recorded and automatically exchanged between many countries under the Organization for Economic Co-operation and Development (OECD) Standard for Automatic Exchange of Financial Account Information.

The OECD Common Reporting Standard (CRS) has evolved out of an OECD-led initiative currently supported by the 94 Participating Countries. These countries are committed to increasing tax transparency through automatic exchange of tax related information with the aim of countering tax evasion. So called ‘early adopter’ Participating Countries will commence information reporting in 2017 for the 2016 calendar year. More recent signatories to the initiative will commence information reporting one year later. The number of countries signing up to CRS is expected to continue to increase.

Within the CRS framework, Participating Countries will enter into bilateral or multilateral competent Authority Agreements among themselves (CA Agreements). Whilst CA Agreements are based on a template and contain common provisions, they are nevertheless designed to cater for the nuances of each Participating Country’s legal and tax system. Consequently CA Agreements and the manner in which CRS will be implemented may therefore vary by some degree from jurisdiction to jurisdiction.

DOES CRS AFFECT YOU?

If you are an individual who is tax resident in a Participating Country and hold a financial account with a financial institution in a second Participating Country, the latter will provide information about your account to the country in which you are tax resident. Being tax resident in more than one Participating Country will likely lead to multi – jurisdictional reporting of the same account information.

The definition of a financial account is widely drawn and encompasses not only depository and custodial accounts, but also equity and debt interests held in investment entities. These include not only shareholdings or units in collective investment schemes, but also equity interests in a trust, or similar legal arrangement. In addition to the value attributable to the financial account, gross payments made during the period to the account-holder are also reportable.

WHAT INFORMATION WILL BE EXCHANGED?

Subject to any specific provisions in the governing CA Agreements, financial institutions in Participating Countries will be required to provide the following information to their respective tax authorities, for onward transmission to the tax authority of the jurisdiction in which the account holder is tax resident, of all reportable persons holding accounts with them:

Account Holder Identification information

  1. name, date and place of birth;
  2. address; and
  3. jurisdiction(s) of residence and tax identification number (if they have one).

Account Information

  1. the account number or functional equivalent that identifies the reportable account, and
  2. the name and identifying number (if any) of the Reporting Financial Institution.

Financial Information

  1. the account balance or value; or
  2. if the account was closed during the period, the fact of closure(but not the account balance).

Trust Information

The reportable values attributed to an equity interest holder in a trust depends on the nature of that equity interest, but include:

Equity Interest /Financial Account Holder Account Balance or Value Gross Payments
Settlor (regardless of amountsettled) Total value of all trust property Value of payments made to theSettlor in the reporting period (if any)
Beneficiary: With a vestedinterest Total value of all trust property Value of distributions made to the beneficiary in the reporting period
Beneficiary: Discretionary (in ayear in which a distribution isreceived) Nil Value of distributions made to the beneficiary in the reporting period
Any other person exercisingultimate effective control (e.g. a Protector) Total value of all trust property Value of distributions made toSuch person in the reporting period (if any)
Debt interest holder Principal amount of the debt Value of payments made in reporting

 

NEED TO SEEK PROFESSIONAL ADVICE

This article is for general information purposes only, and is not to be relied upon as guidance for specific circumstances.

If you believe you may be affected by CRS and are unsure of the implications of this, it is strongly recommended that you seek professional advice to clarify the situation and determine the options available to you.

WHICH COUNTRIES ARE COMMITTED TO CRS?

Early Adopters Group undertaking first exchanges by September 2017, first reporting period as at calendar year-end 2016 (56 jurisdictions):

Anguilla Argentina Barbados Belgium
Bermuda British Virgin Islands Bulgaria Cayman Islands
Colombia Croatia Curaçao, Cyprus
Czech Republic Denmark Dominica 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 Mauritius 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

Jurisdictions undertaking first exchanges by September 2018, first reporting period as calendar year 2017 (38 jurisdictions; some of these jurisdictions may adopt CRS earlier if deemed feasible):

Albania Andorra Antigua and Barbuda Aruba
Australia Austria The Bahamas Belize
Brazil Brunei Darussalam Canada
Chile Costa Rica China Ghana
Grenada Hong Kong (China) Indonesia Israel
Japan Marshall Islands Macao (China) Malaysia
Monaco New Zealand Qatar Russia
Saint Kitts and Nevis Samoa Saint Lucia Saint Vincent and the Grenadines
Saudi Arabia Singapore Saint Maarten
Switzerland Turkey United Arab Emirates Uruguay

 

Signatories of the Multilateral Competent Authority Agreement (61 Jurisdictions)

Albana Anguilla Argentina Aruba
Australia Austria Belgium British Virgin Islands
Canada Cayman Islands Chile Colombia
Costa Rica Croatia Curaçao Cyprus
Czech Republic Denmark Estonia Faroe Islands
Finland France Germany Ghana
Gibraltar Greece Guernsey Hungary
Iceland India Indonesia Ireland
Isle of Man Italy Jersey Korea
Latvia Liechtenstein Lithuania Luxembourg
Malta Mauritius Mexico Montserrat
Netherlands New Zealand Norway Poland
Portugal Romania San Marino Seychelles
Slovak Republic Slovenia South Africa Spain
Sweden Switzerland Turks and Caicos Islands United Kingdom