UK and International Tax news
First Automatic CRS Exchanges Due
Friday 22nd September 2017
The first automatic Common Reporting Standard exchanges between 49 jurisdictions are set to take place this month.
In 2014, the OECD and the G20 approved the Common Reporting Standard (CRS), to be the basis for the automatic annual exchange of information on offshore financial accounts to the tax authorities of the residence country of account holders.
Currently, 102 jurisdictions have publicly committed to implement the CRS, with 49 being committed to start exchanges this month and a further 53 taking up exchanges in September 2018.
The successful implementation of the CRS requires both domestic legislation to ensure that financial institutions correctly identify and report accounts held by non-residents, and an international legal framework for the automatic exchange of CRS information. The preferred route to put the international legal framework in place is through the CRS Multilateral Competent Authority agreement (CRS MCAA), which defines the scope, timing, format and conditions for the exchange of CRS information and is based on the multilateral Convention on Mutual Administrative Assistance in Tax Matters, being the prime instrument for cooperation in tax matters. 95 jurisdictions have already have signed the CRS MCAA.
While the CRS MCAA is a multilateral agreement, exchange relationships for CRS information are bilateral in nature and are activated when both jurisdictions have the domestic framework for CRS exchange in place and have listed each other as intended exchange partners.
The OECD has announced that there are now over 2000 bilateral relationships for the automatic exchange of CRS information in place across the globe.
First exchanges for jurisdictions committed to a 2017 timeline are now weeks away, and all 49 jurisdictions have now activated their exchange relationships under the CRS MCAA. The network of bilateral exchange relationships, including those established through the EU DAC2 Directive and bilateral agreements, now covers over 99% of the total number of possible exchange relationships. In addition, 20 of the 53 jurisdictions committed to first exchanges in 2018 have already put the international legal requirements in place to commence exchanges under the CRS MCAA next year.
A further activation round for jurisdictions committed to a 2018 timeline is scheduled to take place in November 2017 which will allow the remaining jurisdictions to nominate the partners with which they will undertake automatic exchanges of CRS information.
For further information on the above, please contact Keith Rushen on 0207 486 2378.
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