What is the Global standard of automatic exchange of information about financial accounts (AEOI & CRS) (hereinafter – the “Global standard”)?
The global standard of automatic exchange of information on financial accounts (original title in English – Global Standard for Automatic Exchange of Financial Account Information in Tax Matters and Common Reporting Standard) is an international political initiative of the G20 member countries and countries participating in the Organization of Economic Cooperation and development (OECD / OECD), aimed at joint international fight against tax evasion and the illegal concealment of undeclared income in foreign financial institutions.
How the requirements of Global standard implemented in real life?
The OECD has developed and published the fundamentals and practical tools implementation of the Global standard, which were endorsed by the member countries of G20 at summit in September 2014.
International obligations of countries participating in the global standard, in the vast majority are fixed in the form of accession to the Convention on mutual administrative assistance in the tax area on 25.01.1988 and by the signing and ratification of the Multilateral Agreement between the competent The European Union (EU), in parallel with individual participation and the signing of the EU-member states of the agreement MCAA, acceded to the global standard through the adoption of the EU Directive 2014/107 / EU of 09.12.2014 (DAC2), which introduces the automatic exchange of information about financial accounts and assigns it to EU member countries. Coordinating organization for the dissemination, development, promotion and development of comments and other supporting materials in relation.institutions (MCAA), which was signed by the first countries-participants in the October 2014.
To whom and how will influence the Global standard?
First of all we should say about which institutions, in accordance with the provisions of the Global standard, impose obligations for the collection and transmission of information to the authorities. It all financial counterparties working in the territory of any of the member countries of the Global standard. This is primarily banks and investment institutions, brokers and certain insurance companies.
From 1 January 2016 came into force the next Global standard requirements for financial institutions:
- to figure out from their customers and beneficial owners of client country (s) and / or location (s) of their tax residence by receiving from the client the appropriate declaration form approved by the national legislation and / or verification and analysis available to financial institutions, information and documents relating to the client, as well as the verification received from the client-assurance declaration;
- annually beginning from 2017, send to the national tax authority information and details of customers’ accounts, certain by regulatory enactments and, in certain cases, information about the beneficial owners of customers, if the first and / or second are tax residents of countries joining and participating in the Global standard. In its turn the tax authority of the country carries out an annual mutual exchange of such information about tax resident with the fiscal authorities of the countries participating in Global standard;
- to track changes in the circumstances and details of the customers, which may affect the change of tax residence;
- take any other actions stipulated by regulations.
How Global standard will affect the customers of financial institutions and what it will take from them?
Customers will have to to provide a declaration form indicating the country (s) and / or location (s) of their tax residence, as well as similar information with respect to beneficial owners of customers.
Also, the financial institution may request from the client of the legal entity / organization declaration-assurances about the character of its business activities, i.e. whether such activities are active or passive. After analyzing the declaration-assurances provided by the client and comparing it with their existing bank data and information on the client, it may be necessary to contact the client for further explanations. Client upon request of the financial institution is obliged to provide accurate declaration form, as well as documents confirming the information stated in this form.
What kind of customer financial institutions will submit information to the tax authorities?
Automatic exchange between countries and transmission into the national tax authority is subject to the information on the accounts of only those customers who are tax resident in a jurisdiction which joined and started to use the Global standard. The duty towards information about these customers and their accounts appears only when the customer’s jurisdiction was entered into the list of jurisdictions participating in standard. A similar procedure shall also apply to information on beneficial ownership of customers who are passive non-financial organizations.
From the statements of the Global standard are excluded clients who are:
- organization, whose shares are regularly traded on an organized securities market, or an organization affiliated with the public face;
- government agencies, international organizations, the central bank;
- financial institution.
What information financial institutions will be sent about customer accounts to the national tax authority?
In relation to the client (physical person and legal entity / organization)
- name, last name / name
- address
- taxpayer number
- date and place of birth (for individuals)
- jurisdiction (ies) of tax residence
- account number
- account balance as of the end of the reporting calendar year
- the size of interest income actually received by the bank during the reporting year + additionally on the investments accounts:
- the size of interest income, dividends and other income actually received during the reporting year
- the amount of income derived from the sale or maturity of these financial instruments is actually credited in the reporting year
In relation to the beneficial owners of customers who are passive nonfinancial institutions
- name, surname
- address
- taxpayer number
- date and place of birth
- jurisdiction (ies) of tax residence.
List of countries participating in Global standard (as of May 12, 2016)
|
Jurisdiction |
Start date of the exchange of information |
| 1. Australia | September 2018 |
| 2. Austria | September 2018 |
| 3. Albania | September 2018 |
| 4. Andorra | September 2018 |
| 5. Antigua and Barbuda | September 2018 |
| 6. Argentina | September 2017 |
| 7. Aruba | September 2018 |
| 8. Barbados | September 2017 |
| 9. Belize | September 2018 |
| 10. Belgium | September 2017 |
| 11. Bermuda Islands | September 2017 |
| 12. Bulgaria | September 2017 |
| 13. The British Virgin Islands | September 2017 |
| 14. Hungary | September 2017 |
| 15. Ghana | September 2018 |
| 16. Germany | September 2017 |
| 17. Guernsey | September 2017 |
| 18. Gibraltar | September 2017 |
| 19. Grenada | September 2018 |
| 20. Greenland | September 2017 |
| 21. Greece | September 2017 |
| 22. Denmark | September 2017 |
| 23. Jersey | September 2017 |
| 24. Israel | September 2018 |
| 25. India | September 2017 |
| 26. Indonesia | September 2018 |
| 27. Ireland | September 2017 |
| 28. Iceland | September 2017 |
| 29. Spain | September 2017 |
| 30. Italy | September 2017 |
| 31. Canary Islands | September 2017 |
| 32. Canada | September 2017 |
| 33. Cyprus | September 2017 |
| 34. China (Peoples Republic) | September 2018 |
| 35. Colombia | September 2017 |
| 36. Korea | September 2017 |
| 37. Costa Rica | September 2018 |
| 38. Latvia | September 2017 |
| 39. Lithuania | September 2017 |
| 40. Liechtenstein | September 2017 |
| 41. Luxembourg | September 2017 |
| 42. Mauritius | September 2017 |
| 43. Malaysia | September 2018 |
| 44. Malta | September 2017 |
| 45. The Marshall Islands | September 2018 |
| 46. Mexico | September 2017 |
| 47. Monaco | September 2018 |
| 48. Netherlands | September 2017 |
| 49. New Zealand | September 2018 |
| 50. Norway | September 2017 |
| 51. i. Curacao | September 2017 |
| 52. i. Anguilla | September 2017 |
| 53. i. Montserrat | September 2017 |
| 54. i. Niue | September 2017 |
| 55. The Isle of Man | September 2017 |
| 56. Cook Islands | September 2018 |
| 57. Poland | September 2017 |
| 58. Portugal | September 2017 |
| 59. The Russian Federation | September 2018 |
| 60. Romania | September 2017 |
| 61. Samoa | September 2018 |
| 62. San Marino | September 2017 |
| 63. Seychelles | September 2017 |
| 64. Saint Vincent and the Grenadines | September 2018 |
| 65. Saint Kitts and Nevis | September 2018 |
| 66. Saint Lucia | September 2018 |
| 67. Sint Maarten | September 2018 |
| 68. Slovakia | September 2017 |
| 69. Slovenia | September 2017 |
| 70. United Kingdom | September 2017 |
| 71. Turkish and Caicos islands | September 2017 |
| 72. The Faroe Islands | September 2017 |
| 73. Finland | September 2017 |
| 74. France | September 2017 |
| 75. Croatia | September 2017 |
| 76. Czech Republic | September 2017 |
| 77. Chile | September 2018 |
| 78. Switzerland | September 2018 |
| 79. Sweden | September 2017 |
| 80. Estonia | September 2017 |
| 81. South Africa | September 2017 |
| 82. Japan | September 2018 |