What is the Common Reporting Standard?
Leave a CommentWhat is the Common Reporting Standard – Introduction
The Common Reporting Standard (CRS) is sometimes described as the world’s answer to FATCA.
Developed by the OECD and adopted by over 100 jurisdictions, CRS aims to crack down on global tax evasion by enabling automatic exchange of financial account information between countries.
How it Works
CRS requires financial institutions in participating jurisdictions to collect information about their account holders and report it to their local tax authorities.
These authorities then exchange the data with the relevant countries where the account holders are tax residents.
The scope is wide. CRS covers individuals and entities, and applies to a range of financial assets, including bank accounts, investment income, insurance products and even certain types of trusts and foundations.
What Gets Reported?
Typical data reported includes:
- Name, address, tax identification number (TIN), and date/place of birth (for individuals)
- Account number and balance/value
- Interest, dividends, and gross proceeds from the sale of financial assets
Who is Affected?
Anyone holding financial accounts outside their country of tax residence could be affected.
Financial institutions have had to overhaul onboarding procedures and due diligence checks.
CRS also affects family offices, trusts, and private investment structures.
Unlike FATCA, which focuses on US taxpayers, CRS is multilateral – and it doesn’t rely on any one country enforcing it. Countries commit to reciprocal information exchange.
Comparison with FATCA
FATCA and CRS share many features but differ in scope and origin.
FATCA is a unilateral US initiative with global effects; CRS is a multilateral agreement coordinated through the OECD.
CRS doesn’t have the same teeth as FATCA (no 30% withholding), but it casts a wider net.
What is the Common Reporting Standard – Conclusion
The Common Reporting Standard represents a new normal in cross-border tax compliance.
It marks the end of banking secrecy and the rise of a transparency-first global tax environment.
Final Thoughts
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