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.