Background: Common Reporting Standard
The Common Reporting Standard
The Common Reporting Standard (CRS) is the result of the drive by the G20 nations to develop a global standard for the automatic exchange of financial account information. Developed by the OECD, the CRS aims to maximise efficiency and reduce costs for Financial Institutions by drawing heavily on the approach taken to implementing FATCA.
There are some distinct differences between the two systems, driven to a large extent by the multilateral nature of the CRS compared to FATCA and the US specific features of FATCA, such as tax residency in the USA including citizenship and the FATCA withholding tax which introduces additional features into the reporting process that are not needed when implementing the CRS.
In October 2014, 45 jurisdictions signed a multilateral competent authority agreement to start exchanging information using the CRS framework from 2017. A further 4 signed the same agreement with a commitment to start exchanging information in 2018. Since then more jurisdictions have either signed the multilateral competent authority agreement, or made a commitment to automatic exchange, such that over 100 jurisdictions have indicated that they will exchange information on financial accounts. The regulations that require UK Financial Institutions to collect, maintain and report information for exchange with these jurisdictions are The International Tax Compliance Regulations 2015 (as amended by 2015 No. 1839, 2016 No. 899, 2017 No. 598).
The current list of participating jurisdictions for automatic exchange under both the CRS and the DAC can be found at IEIM400090.