OECD CRS Implementation Handbook (Second Edition)

Document Overview

Summary and analysis of the official DITC document: OECD CRS Implementation Handbook (Second Edition).

Key Concepts Covered

• Common Reporting Standard (CRS)
• FATCA
• Self-Certification
• Reporting Financial Institution
• Reportable Jurisdiction
• Penalties and Enforcement

Deadlines & Timelines Mentioned

• The Standard has now moved from the design to implementation and application phase with the first exchanges having taken place in September 2017.
• It must be construed in such a manner to correspond to the definition of the term “beneficial owner” as described in the Financial Action Task Force (“FATF”) Recommendation 10 and the accompanying Interpretative Note as adopted in February 2012.
• Therefore, the first edition of this Handbook provided for a more relaxed transitory approach that was set to expire on 1 July 2017.
• To reduce burdens for Reporting Financial Institutions, a jurisdiction may also consider allowing their Reporting Financial Institutions to apply to such accounts due diligence procedures for Preexisting Accounts, even if such accounts were opened after 1 January 2016.
• On 29 October 2014, the first 51 jurisdictions signed the MCAA 5 to implement the Standard.
• Over the last two years, many more have followed suit, bringing the total number of signatories to 98 as of 1 March 2018 6.
• It will need to be after the end of the calendar year and before the end of September of the following year, which is the deadline contained in the MCAA for Competent Authorities to exchange the information.
• Consideration should also be given to the interaction between the reporting date in relation to the Standard and the other tax reporting requirements the Financial Institutions have, whether domestic or international.
• Exception to this is category (b) Investment Entities that are not Participating 11 Please note that Step 1 and Step 2 depicted in Figure 10 may also be taken in reverse order.
• A balance or value of $1m or less at the point of review (starting on 31 December in the year that defines Preexisting Accounts, which is the day before the start date for the procedures for New Accounts, and each year thereafter) means that the account is a Lower Value Account.
• 13 Please note that steps 2 and 3 may be taken in either order.
• For account balances the relevant balance or value must be determined as of 31 December of the calendar year, or, if an alternative reporting period is used then the relevant balance or value must be determined as of the last day of the reporting period, within that calendar year.
• This reflects a similar obligation contained in the 2012 FATF Recommendations (as printed in March 2012; see Interpretive Note to Recommendation 10, at footnote 31).
• It is important to point out that the ownership threshold for legal persons of 25% that is specified in footnote 30 in the Interpretative Note to Recommendation 10 of the 2012 FATF Recommendations (as printed in March 2012) is only indicative.
• Footnote 30 to the Interpretative Note to Recommendation 10 of the 2012 FATF Recommendations (as printed in March 2012) gives an exemplary ownership threshold of 25%.

Document Snippet

© OECD 2017 1 Standard for Automatic Exchange of Financial Information in Tax Matters IMPLEMENTATION HANDBOOK Second edition Standard for Automatic Exchange of Financial Information in Tax Matters Implementation Handbook SECOND EDITION nTablE Of COnTEnTsn 2 © OECD 2017 Photos credits: © AdobeStock.com © OECD 2018 You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of the source and copyright owner(s) is given. All requests for public or commercial use and translation rights should be submitted to rights@oecd.org. Requests for permission to photocopy portions of this material for public or commercial use shall be addressed directly to the Copyright Clearance Center (CCC) at info@copyright.com or the Centre francais d’exploitation du droit de copie (CFC) at contact@cfcopies.com. This document, as well as any data and any map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundarie...