9 Common Reporting Standard

This topic explains about Common Reporting Standard.

The Common Reporting Standard (CRS), formally referred to as the Standard for Automatic Exchange of Financial Account Information, is an information standard for the Automatic Exchange Of Information (AEOI), developed in the context of the Organization for Economic Co-operation and Development (OECD).

The legal basis for exchange of data is the Convention on Mutual Administrative Assistance in Tax Matters and the idea is based on the USA Foreign Account Tax Compliance Act (FATCA) implementation agreements.

On May 6, 2014, Forty-seven countries tentatively agreed on a Common Reporting Standard, an agreement to share information on resident’s assets and incomes automatically in conformation with the standard. Until now, the parties to most treaties which are in place for sharing information have shared information upon request, which has not proved effective in preventing tax evasion.

The new system will automatically and systematically transfer all the relevant information. This agreement is informally referred to as GATCA (the Global version of FATCA), but ‘CRS is not just an extension of FATCA’.

Endorsing countries included all OECD countries, as well as Argentina, Brazil, China, Colombia, Costa Rica, India, Indonesia, Latvia, Lithuania, Malaysia, Saudi Arabia, Singapore, and South Africa. In September 2014, the G-20, at its meeting in Cairns, Australia, issued the G20 Common Reporting Standard Implementation Plan as part of its official resources.

On 29 October 2014, 51 jurisdictions signed an agreement to automatically exchange information based on Article 6 of the Convention on Mutual Administrative Assistance in Tax Matters. This agreement specifies the details of what information will be exchanged and when, as set out in the Standard. China, Hong Kong and more than 80 countries have agreed to become signatories.