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- CRS - Common Report Standard
CRS - Common Report Standard
CRS Background
The US launched FATCA (Foreign Account Tax Compliance Act) in 2010. The FATCA required the identification and reporting of US taxpayers by foreign financial institutions. The OECD and G20 is to disclosure of wealth held in offshore accounts. CRS is also viewed as an enhanced version of FATCA.
The CRS stipulates the identification requirements and reporting obligations of financial institutions to collect and report information of foreign tax-resident individuals and entities to domestic tax authorities.
Over 120 countries committed to exchange information include: Australia, Canada, China, Hong Kong, India, Indonesia, Korea, Macao, Malaysia, Singapore, UK…etc.
CRS in HK
Hong Kong will only conduct exchange of financial account information with a reportable jurisdiction when an arrangement is in place.
Hong Kong's network for tax information exchange has been expanded. The Inland Revenue Amendment No.2 Ordinance 2019 increase the number of reportable jurisdictions to 126 with effect from 1 Jan. 2020.
CRS in China
On 19 May 2017, the State Administration of Taxation along with the Ministry of Finance, Peoples’ Bank of China, China Banking Regulatory Commission, China Insurance Regulatory Commission and China Securities Regulatory Commission jointly released to the public the “Measures on the Due Diligence of Non-resident Financial Account Information in Tax Matters”, Announcement (2017) No. 14, dated 9 May 2017.
This is a long-awaited tax and regulatory circular which provides the overall framework for implementing the Standard for Automatic Exchange of Financial Information in Tax Matters (hereinafter referred to as “the AEOI Standard”) in China that was formulated by the Organization for Economic Co-operation and Development.
CRS in S’pore
Singapore signed the CRS MCAA. The signing of the CRS MCAA will enable Singapore to efficiently establish a network of exchange relationships for the automatic exchange of information based on the CRS.
Under the CRS MCAA, a bilateral exchange relationship comes into effect only if both jurisdictions are signatories to the CRS MCAA.
Singapore has been activated with more than 60 jurisdiction including: Australia, Belgium, Canada, China, Cyprus, Gibraltar, Greece, Guernsey, India, Indonesia, Jersey, Luxembourg, Malaysia, Mexico, Portugal, Spain.
CRS in Taiwan
Due to Taiwan’s ineligibility to become an OECD member, Taiwan cannot participate in the CRS. In order to prevent Taiwan from being viewed as a jurisdiction that fails to comply with the CRS, and in the list of non-cooperative tax jurisdictions issued by the OECD, the MOF of Taiwan issued a draft version of the CRS regulations in 2017.
The draft CRS regulations provide information relating to due diligence procedures and the implementation of the CRS in Taiwan. CRS came into effect in Taiwan on 1 Jan. 2019, and the first exchange of CRS information started in September 2020.