By: Eojourian & Georgiou LLC
The Common Reporting Standard (CRS) is an information standard for the Automatic Exchange Of Information (AEOI), regarding financial accounts globally, this is between tax authorities which the Organization of Economic Co- operation and Development (OECD) has developed in 2014. It scope is the avoidance of tax evasion.
The CRS requires financial institutions to identify the tax residency of all our customers and in most cases report information on customers who are tax resident outside of the country/jurisdiction where they hold their accounts
“Reportable Person” a Reportable Person is an individual (or entity) that is tax resident in a Reportable Jurisdiction under the laws of that jurisdiction.
There are still countries 100 countries that do not share this information under CRS. In Europe i.e. Serbia, Georgia and Armenia do not share this information.
WHAT YOU SHOULD KNOW:
1.Business Accounts existence before CRS are excluded
If it is a corporate account that was in existence before 2016 and the balance is less than $250,000 no information are authorized to be exchanged under CRS.
2.Moving your Tax Residency
Moving your tax residency for example: tax heaven, your overseas bank will send the information there. There are jurisdictions named ‘Voluntary Secrecy Countries’ and are sending information to foreign countries but they have the option not to receive any information on their citizens or residents.
3.Only shareholders holding more than 25% are disclosed (linked to the Ubo(s) /Controlling person of a company)
CRS applies to the shareholders holds more than 25% of the shareholding structure. A corporate shareholding structure with 5 shareholders holding 20% each, is not reportable, however a complicated structure is considered a high-risk client by default, following close AML monitor by the bank institution.
4.Only financial investments business is reportable under CRS
5.Listed companies are not reportable under CRS (listed under recognized stock exchange)
6.The account balance is reported once a year, 31st December. In case of zero balance this is reported to your home country under CRS.
WHAT YOU SHOULD CONSIDER:
1.Be aware who is completing your CRS and FATCA when you are proceeding with opening of a bank account corporate or individual.
2.Proceed with tax advice and re-structuring, if necessary.
3.ALWAYS, Consult your legal expert.
Contact us to FIND OUT MORE.
Email: info@eojgeo.com
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