It is common for governments to look for ways to increase their tax revenue and bring transparency into global finances. Since 2017 information between countries are exchanged internationally through Financial Institutions (FIs) with the aim of improving tax transparency and reducing tax evasion. This is done through the Common Reporting Standard (CRS) in which more than 90 countries have signed up to since 2018.
What is the Common Reporting Standard?
The international standard sets the rules for the automated exchange of bank account information that corporate providers, banks and insurance firms must comply by and report to the relevant tax authority regarding non-residents and their financial activities.
What type of information will be collected and disclosed?
At Mann’s Solutions, we take care of due diligence reporting obligations under the CRS and remind our clients to disclose all information relating to their individual bank accounts. In addition, other income such as interest and dividends received in other jurisdictions will need to be disclosed as well.
Information collected and shared by tax authorities are as follows:
- Data for identification e.g Full Name, Residence, Tax Id and Date of Birth
- Relevant jurisdiction and current residence of individual
- Bank Account Information
- Income transferred to the bank account and other forms of income such as dividends and interest
- Information from sales of financial assets
With no minimum account balance threshold, we provide advice to international entrepreneurs and high net worth individuals with multiple investments across jurisdictions.
Who is most likely to be affected by CRS?
If the jurisdiction starts implementing CRS, then Individuals with considerable financial assets aboard such as property or/and foreign investments will have a high chance to be affected by the standard.
Consultants of Mann’s Solutions strongly advise our clients and international entrepreneurs and investors to take early steps in advance in the preparation of organising an international wealth structure that complies with the CRS before September 2018. The Standard is likely to be adopted by many jurisdictions as we go on.