OECD Gives Update on Common Reporting Standard

The Organisation for Economic Co-operation and Development (OECD) provided an update on the implementation of the Common Reporting Standard (CRS) during its recent "Tax Talks" forum.  The forum is designed to provide updates on important recent and upcoming developments in the OECD's international tax work.

The CRS, was developed in response to the G20 request and approved by the OECD Council and calls on jurisdictions to obtain information from their financial institutions, such as the account balances of non-citizens who are not residents of the jurisdiction, and automatically exchange that information with other jurisdictions on an annual basis, mainly for the purpose of limiting the opportunities for taxpayers to circumvent reporting.

During the forum, OECD reported that 49 jurisdictions commenced their reporting on September 30, 2017, and another 53 jurisdictions are slated to commence reporting in September of 2018.  The United Kingdom and the EU states commenced in 2017, with Canada and Australia scheduled for 2018.  The United States has not chosen to participate in the CRS.  A complete list of the signatories, together with their respective implementation date can be found here


Common Reporting Standards Commencing This Month

The Organisation for Economic Co-operation and Development (OECD) recently announced the commencement of bilateral exchange of financial account information under the Common Reporting Standard (CRS) as well as another series of bilateral exchange relationships established under the the CRS. This brings the number of bilateral relationships for the automatic exchange of financial account balances of non-resident, non-citizens held across the globe to over 2000.

At present, 102 jurisdictions have publicly committed to implement the CRS, with 49 being committed to start exchanges this month and a further 53 slated to take up exchanges in September 2018.

With first exchanges for jurisdictions committed to a 2017 timeline now being only weeks away, all 49 have now activated their exchange relationships under the CRS Multilateral Competent Aurhority Agreement (CRS MCAA) and the network of bilateral exchange relationships now covers over 99% of the total number of possible exchange relationships.

The OECD’s Common Reporting Standard is modeled on the United States’ Foreign Account Tax Compliance Act (FATCA) and is intended to help combat tax-evasion by individuals who are using “offshore” financial accounts, i.e. accounts located in jurisdictions where they do not reside, to hide investment income from their home countries’ tax authorities.  Credit unions subject to the Common Reporting Standard will be required to make annual reports to their jurisdiction’s tax authority about accounts held by members who are not local residents, including those accounts’ balances.

A copy of the OECD press release can be viewed here.