This page is a technical appendix to the blog post CRS - Coming Soon to a Bank Near You (published 1 May 2017).

Reporting Institutions

CRS has a broader definition for reporting Financial Institutions than FATCA. From the CRS Guidance:

Other exclusions found in the FATCA Agreement but not available under the CRS are:
* local banks
* financial institutions with a local client base
* financial institutions with only low-value accounts
* sponsored investment entity and controlled foreign corporation
* sponsored closely-held investment vehicle.

Further categories also treated as non-reporting financial institutions are those treated as deemed-compliant financial institutions or exempt beneficial owners in the current U.S. FATCA Regulations.

From 1 July 2017, there are entities falling within FATCA excluded categories that will be required to fulfill due diligence and reporting obligations for the first time as a result of the commencement of the CRS.

Types of Financial Accounts

Reportable Accounts are divided into five categories:

  1. Depository Accounts
  2. Custodial Accounts
  3. Equity and debt interest in certain Investment Entities
  4. Cash Value Insurance Contracts
  5. Annuity Contracts

For a detailed definition/description of each type of account see this section of the AEOI Guidance.

Due Diligence

FIs must apply specified Due Diligence procedures under both CRS and FATCA.

For the CRS, RFIs are required to establish whether a person holding the account is tax resident in any foreign jurisdiction. For FATCA, the RFI must establish whether an account holder is tax resident in the U.S. which, for individuals, also includes determining if they are a citizen of the U.S. irrespective of where they reside.

AML/KYC (Anti Money Laundering / Know Your Client) procedures must be applied to every new account (this is not a new requirement. More information can be found on the Austrac website). In addition, FIs must collect self-certification of tax residence and any required information from reportable persons (those with a tax residence outside of Australia). Customers knowingly providing false or misleading self-certification are subject to Administrative Penalties - see section 396-135 of the TAXATION ADMINISTRATION ACT 1953.

Pre-existing accounts (accounts opened before 1 July 2017) have specific due diligence requirements. The CRS Implementation Handbook contains this flowchart for Due Diligence procedures on pre-existing individual accounts:

Reportable Information

A detailed comparison of CRS and FATCA reportable information is available on the ATO website

EU Pressure on US

From EU Panama Papers Probe Head: U.S. Tax Loopholes Must Be Closed:

Q. As you leave the U.S. for the return to Brussels, do you believe there is a commitment on the part of the Republican-controlled U.S. Congress to back legislation that would implement the Organization for Economic Cooperation and Development’s common reporting standard?

A. “The answers we received on this is that the U.S. has the FATCA [Foreign Account Tax Compliance Agreement]. But for us in Europe, FATCA is not good enough. There is no reciprocity with FATCA. We need to receive data as well as send it. That is the whole point of the Common Reporting Standard.”

Report to Parliament

CRS requires the Tax Commissioner to report to Parliament the number of accounts reported under CRS starting with calendar year 2018. This is found in section 396-136 of the TAXATION ADMINISTRATION ACT 1953. The first report must be tabled in Parliament no later than the 15th sitting day after 31 December 2020.1)

:!: This provision is only half of the equation. We really OUGHT to be hearing how many records/accounts Australia RECEIVES from its CRS partners (and from the US under FATCA) :!:

Source Material

It appears that the ATO may be merging the FATCA guidance into the AEOI guidance.

I was unable to find a similar provision for FATCA. ~KA
note that this consists of several pages that must be saved separately to the Internet Archive in the event of changes
wiki/contents/fatca/fatca_v_crs.txt · Last modified: 2017/05/06 15:45 by karen
Driven by DokuWiki Recent changes RSS feed Valid CSS Valid XHTML 1.0