Download the full outcome
Detail of outcome
The document sets out the government’s response to the implementing agreements under the global standard on automatic exchange of information consultation document published on 31 July 2014. Consultation took place over a 12 week period from 31 July 2014 and included a public meeting attended by over 100 interested parties. The focus of the consultation was on the obligations of financial institutions and accordingly most of the responses were from such institutions or representative bodies closely connected to the financial sector.
The responses received are summarised and a list of respondents is included, but where appropriate the names of individuals or commercially sensitive information has been redacted. Respondents were generally supportive of the government’s aim to tackle offshore evasion and increase tax transparency through the use of automatic exchange of information, but wanted additional burdens from the implementation of the Common Reporting Standard to be minimised. The government is grateful to all of those who responded and has taken account of their comments.
Regulations have now been laid to implement the UK’s obligations under the European Union (EU) Revised Directive on Administrative Cooperation (Council Directive 2014/107/EU) to improve international tax compliance, and under the Multilateral Competent Authority Agreement implementing the Common Reporting Standard.The regulations incorporate and make minor changes to existing legislation implementing the UK’s exchange of information agreement with the United States of America, known as FATCA (Foreign Account Tax Compliance Act).
The UK has been a leader in the development of automatic exchange of information to help combat tax evasion. In September 2012 the UK signed an agreement with the United States of America (US) to implement the reporting required under US FATCA (Foreign Account Tax Compliance Act) legislation, which requires automatic exchange of financial account information on US citizens and entities. In 2013 the UK signed similar agreements with its Crown Dependencies and Overseas Territories.
Following on from this, in April 2013 the UK along with France, Germany, Italy and Spain (the G5) set up a pilot to explore the possibility of developing a common approach to automatic exchange of financial account information. This was adopted by the G20 leading to work being commissioned with the Organisation for Economic Co-operation and Development (OECD) to develop a new global standard and in February 2014 the OECD delivered the Model Competent Authority Agreements for a Common Reporting Standard (CRS) which was approved by the G20 as the Global Standard for Automatic Exchange of Financial Account Information. The CRS is designed to provide maximum consistency with US FATCA in order to minimise the additional costs and burdens to business from the increased reporting requirements.
Domestic legislation will be required to implement the CRS. Under the proposed regulations that are the subject of this discussion document, financial institutions will be required to capture information in relation to accounts in existence as at 31 December 2015, and new accounts opened on or after 1 January 2016 with first reporting in 2017.