Financial institutions (FIs) face a unique challenge as global tax authorities have recognised the benefit of receiving tax reporting on their tax residents as a measure to counter tax evasion. In July 2014, the Organization for Economic Cooperation and Development (OECD) issued a global Standard for Automatic Exchange of Financial Account Information, including the Commentary on the Common Reporting Standard (CRS). CRS is modelled after the FATCA Model 1 IGAs.
However, CRS account due diligence obligations are similar but not identical to those under FATCA and are broader in scope. CRS will require increased due diligence by financial institutions in order to identify reportable accounts that will need to be exchanged with multiple tax authorities.
Markit | CTI Tax Solutions has built upon its existing tax offerings for information sharing and due diligence, such as the Foreign Account Tax Compliance Act (FATCA) and the European Union Savings Directive (EUSD). For many FIs the scale of reporting will be much larger than under FATCA. Markit | CTI Tax Solutions provides a comprehensive response for account holder self-declarations and consistent reporting to source countries at the beneficial owner level.
Due Diligence for new accounts in 55 early adopter jurisdictions began January 1st 2016. Initial reporting begins in 2017.