The OECD’s Common Reporting Standard (“CRS”) involves the automatic exchange of banking information on legal persons from one signatory country to another country where those legal persons are tax resident. Most of the developed world has signed up to the CRS and it involves a complex web of multilateral agreements which cut across enshrined rights to privacy.
The ‘highlights’ are stated below:
- Around 70 early adopter countries at last count;
- omits countries like Austria and Barbados for now though likely they will be coerced into implementing their own version of the CRS in due course;
- 80+ aiming for OECD Global Standard for Automatic Exchange from initial pilot of 5 countries;
- from 31 December 2015 all information on other taxpayers to be collected and shared either from the bank concerned to foreign tax authorities or to the banks’ home state tax authority;
- EU to adopt Common Reporting Standard in December 2014; and
- from 30 September 2017 initial automated exchange of new accounts and pre-existing high value accounts begins.
The technical details of how the CRS will work in practice have yet to be approved and finalised but this is something to be aware of.