Common Reporting Standard
The Common Reporting Standard, or CRS, approved by the OECD (Organisation for Economic Co-operation and Development) Council in 2014, calls on jurisdictions around the world to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. In a real sense, FATCA has now gone global! The saying “you can run, but you can’t hide,” is becoming a reality.
The report sets forth, for each jurisdiction:
- The financial account information to be exchanged
- The financial institutions required to report
- The different types of accounts and taxpayers covered
- The common due diligence procedures to be followed by financial institutions
How will this affect me?
While this will not directly impact US Persons’ US tax obligations, it may well impact their tax obligations in countries where they live or have investments. Just like FATCA, a taxpayer’s financial accounts in countries other than where they live are now going to be disclosed to their resident country. In other words, “hiding” funds from taxation in the home country is getting increasingly harder and harder. And, the penalties for non-disclosure are increasing throughout the world.
(As of August 2018, 72 countries have signed inter-country agreements implementing CRS.)
Automatic Exchange of Information (AEOI)
In addition to the preparation of Forms W-8BEN-E and W-8IMY, and foreign entity classification discussed in our section on FATCA services, our specialists can help with all aspects of Automatic Exchange of Information (AEOI) and annual reports as required under the CRS agreements.
Did you Know?
Fact SevenThanks to FATCA banks must disclose their American account holders to the IRS or local tax authority.
Fact SixThe IRS is actively looking for non compliant US persons.
Fact FiveIt takes an average of 16 hours to do IRS Form 1040.
Fact FourThere are over 500 IRS tax forms.
Fact ThreeSince 1916, illegal income has been taxable.
Fact TwoUS persons must file tax returns no matter where they live and work.
Text One7 million Americans abroad
only 500,000 compliant