What is CRS?

CRS is short for the “Common Reporting Standard”. It is a global version of FATCA and is sometimes referred to as “Global FATCA” or “GATCA” for short.

How does CRS work?

Countries that have agreed to implement CRS adopt local laws requiring their Financial Institutions (“FIs”) to report taxpayers resident in other countries that have also adopted CRS if those other countries have CRS information exchange agreement with the FI’s country.

Where can I find a list of countries that have implemented to CRS?

The list is available on the OECD’s website, available here. As you will see, some countries (so-called “Early Adopters”) require their FFIs to file their first CRS reports in 2017, and others in 2018.

Have all countries listed on the OECD’s website agreed to exchange information with all other countries listed on the site?

No. Each country must decide which other countries it will exchange information with on a country-by-country basis. A major exception is the EU, which requires all EU countries to exchange CRS information with all other EU countries.

Where can I find a list of countries that have entered into CRS information agreements with other countries?

The list is available on the OECD’s website, available here. That page also includes a tool that where you can enter two countries’ names and quickly see if they have a CRS information exchange agreement in place.

How does CRS differ from FATCA?

The most obvious difference is that FATCA is U.S.-centric: Except for reciprocal IGAs, FATCA is focussed entirely on finding U.S. taxpayers. In contrast, CRS is focussed on finding taxpayers from essentially all CRS countries.

Does CRS differ from FATCA in any other respect?

Yes, in several ways. However, CRS’s basic model is the same as under a Model 1 FATCA IGA. In other words, an FI in a CRS country reports data about foreign taxpayers to the FI’s home country’s tax authorities, which then sends the data to the taxpayer’s home country’s tax authorities (assuming there is a CRS information exchange agreement in place between the two countries).

How does CRS impact the fiduciary industry?

In the same way that FATCA does, but on a more global scale. Just as under FATCA:

  • Many structures offered by fiduciary companies are “FIs” under CRS, with consequent CRS reporting responsibilities
  • Almost all client structures that are not FIs under CRS are “Passive Non-Financial Entities” (“Passive NFEs”), which will be looked through for “Controlling Persons” by any FI where the Passive NFE holds an account. As a result, it is now very difficult for persons in CRS countries to hide accounts in FIs in other CRS countries or to hide behind structures with accounts at FIs in CRS counties.

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