Post on 25-May-2020
transcript
OECD Common Reporting Standard (CRS) implementation in Latvia
17.12.2014.
www.pwc.com
Jana Orlova, PwC Legal Latvia
Liene Skrodere, PwC Germany
PricewaterhouseCoopers SIA
Agenda
1 What is CRS and what is its aim?
2 What is the aim of the EU Directive on Administrative Cooperation (DAC) and how does it affect financial institutions?
3 What is the difference between CRS and FATCA and how will CRS affect the operations of financial institutions?
4 Most notable risks, challenges and solutions of implementing CRS
Agenda
Slide 2
17.12.2014. OECD Common Reporting Standard (CRS)
PricewaterhouseCoopers SIA
What is CRS? What is its aim?
Slide 3
17.12.2014. OECD Common Reporting Standard (CRS)
PricewaterhouseCoopers SIA
CRS has become a widely-discussed topic on the news internationally
Slide 4
17.12.2014. OECD Common Reporting Standard (CRS)
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Banking industry’s secrets are coming to an end…
Bretton Woods (set up post war
financial construct including exchange controls)
1944
Generally only the very wealthy made any significant use
of private tax havens
1945 - 1970
Exchange controls start to be
abolished, leading to enormous
capital flows into "offshore /
international" financial centres
1970
OECD "Harmful tax competition an
emerging global issue" is published
1998
Capital in and use of international financial centres
expands exponentially
1970 - 1998
EU Savings Directive. First
multilateral attempt to end
banking secrecy
2002
Financial crisis leading to a
political backlash
against "tax cheats"
2008
UBS indicted for assisting
with tax evasion for U.S.
citizens
2007
2013
Voluntary disclosure regime
launched by Department of
Justice
2012
FATCA legislation passed
2017
Start of global automatic
exchange of customer
information
2014
Implemen-tation of FATCA
2014 51 countries sign up for automatic
exchange of customer
information
Slide 5
17.12.2014. OECD Common Reporting Standard (CRS)
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Banking industry’s secrets are coming to an end…
FATCA Model 1 IGA includes
commitment to develop a
common model
June ‘12
In Los Cabos, G20 welcomes OECD report on AEOI
July ‘12
G20 Support
AEOI
Nov ‘12
OECD report to G8 on common model for AEOI
June ‘13
G5 pilot (early
adopters)
Apr ‘13
G20 endorse AEOI as new
global standard and ask OECD to develop CRS
Sep ‘13
European Council
commits to adopt DAC2 in
2014
Dec ‘13
GFTEI creates AEOI group
Nov ‘13
Feb ‘14
G20 endorse
CRS
Jan ‘14
OECD approves
first part of standard
Nov ‘14
Full version of CRS presented to
G20 Leaders
Oct ‘14
Ecofin political agreement on revised DAC2
Oct ‘14
51 countries sign up for automatic
exchange of customer
information
Mar ‘14
Early adopters
statement (44
countries)
OECD Ministerial Declaration
May ‘14
Jun ‘14
OECD approves full
version of standard
Jul ‘14
OECD Council Recommend.
on AEOI
Sep ‘14
Full version of CRS endorsed
by G20 Ministers
Slide 6
17.12.2014. OECD Common Reporting Standard (CRS)
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The new tax transparency is covering both, customer and on-balance taxation
Slide 7
17.12.2014. OECD Common Reporting Standard (CRS)
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• OECD: The Organisation for Economic Co-operation and Development
• CRS: Common Reporting Standard
• Purpose: combatting tax evasion
• Start: 1 January 2016
• Affected entities: Financial institutions
• Data to be exchanged: Financial account information
• Affected clients: Reportable persons
What is OECD CRS?
Slide 8
17.12.2014. OECD Common Reporting Standard (CRS)
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CRS - overview of key process
17.12.2014. OECD Common Reporting Standard (CRS)
Slide 9
What to report
When to report
• Basic account information including place of birth if local law already requires it to be obtained and reported
• Certain payments and gross proceeds
• FI date: 2017 but exact date to be provided in local guidance
• Exchange date between Governments: Annually from 2017
Who to report
on
Reportable Accounts held by: • Reportable person(s); or • Passive NFE’s with one or more controlling
person(s) who are reportable persons
Reporting FIs will report the data to local authorities annually, who will automatically exchange the
information with the other participating jurisdictions. The CRS reporting schema will be used by
Governments to exchange the information and may also be used by Reporting FI’s but this will be
dependent on local jurisdiction guidelines.
How to report
Verify
Ready
• Confirm the reasonableness of self-certification on the basis of AML/KYC information and relationship manager’s knowledge
• Monitor for change in circumstances
• Account aggregation • Generating report
Gather
Information to acquire from new client: • Identification information • Tax identification number (TIN) • Tax residency jurisdiction
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Within CRS term «Financial Institution» denotes a Custodial Institution, a Depository Institution, and Investment Entity, or a Specified Insurance Company
Financial institution Respective institutions
Custodial institution – any Entity that holds, as a substantial portion of its business, Financial Assets for the account of others.
• Banks • Brokers • Pension funds • Payment institutions • Asset managers • Life insurance companies
Depository institution – any Entity that accepts deposits in the ordinary course of a banking or similar business.
Investment entity – any Entity that that primarily conducts as a business one or more of the following activities:
• Trading in money market instruments; • Individual and collective portfolio management; • Otherwise investing, administering, or managing
Financial Assets or money on behalf of other persons;
Specified Insurance Company – any Entity that is an insurance company (or the holding company of an insurance company) that issues, or is obligated to make payments with respect to, a Cash Value Insurance Contract or an Annuity Contract.
Slide 10
17.12.2014. OECD Common Reporting Standard (CRS)
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What is meant with «Financial account»?
Financial account Respective product
Financial account – an account maintained by a Financial Institution, and includes: • a Depository Account, • a Custodial Account, • any equity or debt interest in the Financial
Institution, • any equity or debt interest in the Financial
Institution, if the class of interests was established with a purpose of avoiding reporting,
• any Cash Value* Insurance Contract, • any Annuity Contract issued or maintained
by a Financial Institution other than a noninvestment-linked, non-transferable immediate life annuity.
• Bank savings, deposit, securities accounts
• Brokers – financial instrument/ securities accounts
• Payment institutions – accounts where client funds are held
• Asset managers – accounts where client funds are held under individual portfolio management, investment fund certificates
• Life insurance – life insurance contracts
• Pension funds – pension fund certificates
* Cash value – the greater of (i) the amount that the policyholder is entitled to receive upon surrender or termination of the contract (determined without reduction for any surrender charge or policy loan), and (ii) the amount the policyholder can borrow under or with regard to the contract.
Slide 11
17.12.2014. OECD Common Reporting Standard (CRS)
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OECD CRS principles From OECD presentation at European Customer and Investor Tax Transparency Conference (Frankfurt, 3 – 4 November 2014), by Philip Kerfs
Common Reporting Standard (CRS) • Defines reporting and due diligence rules for financial institutions. • To be translated into domestic law by participating jurisdictions. • Based on FATCA, to leverage investments made by financial institutions and governments,
with some amendments to remove US specificities and take into account multilateral context.
Model Competent Authority Agreement (Model CAA) • To activate the exchange of information collected under the CRS. • To be used in combination with any underlying legal instrument permitting AEOI (e.g. Article
26 of the OECD Model Tax Convention or Article 6 of MAAC).
Commentaries on CRS and Model CAA • To ensure consistent implementation and equal level playing field.
Data transmission format (CRS XML Schema) & data transmission and encryption standards
• CRS XML scheme for exchange under CRS was built in parallel with FATCA XML schema to maximise consistency.
Slide 12
17.12.2014. OECD Common Reporting Standard (CRS)
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CRS: Building on FATCA, EU Savings Directive and FATF to have Single Standard and Reduce Cost From OECD presentation at European Customer and Investor Tax Transparency Conference (Frankfurt, 3 – 4 November 2014), by Philip Kerfs
• Personal data: name, address, tax residence, TIN • Financial data: account balance, investment income, sales proceeds from
financial assets
Similar scope of information reported
• Banks, custodians, insurance companies and investment entities (e.g. certain collective investment vehicles)
Similar scope of financial institutions required to report
• Individuals • Entities (including trusts and foundations) • Controlling persons (i.e., beneficial owners) of entities
Similar scope of account holders subject to reporting
• Distinction pre-existing /new, individual/entity, lower value/high value accounts
Similar Due diligence procedures
Slide 13
17.12.2014. OECD Common Reporting Standard (CRS)
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Next steps for OECD From OECD presentation at European Customer and Investor Tax Transparency Conference (Frankfurt, 3 – 4 November 2014), by Philip Kerfs
• Ongoing maintenance to resolve issues and ensure consistency (in consultation with FIs).
• Produce training material (CRS Implementation Handbook) and co-host training events for implementing countries (together with Global Forum).
• CRS portal for both general and country-specific information on implementing the Standard (including information on TINs and residence rules).
• Continued support to « operationalise » Multilateral CAA.
• Voluntary disclosure
• Toolbox for making effective use of information.
• Alignment of TRACE to CRS and assist in country implementation.
Slide 14
17.12.2014. OECD Common Reporting Standard (CRS)
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Next Steps for Country implementation From OECD presentation at European Customer and Investor Tax Transparency Conference (Frankfurt, 3 – 4 November 2014), by Philip Kerfs
• Translating the reporting and due-diligence rules into domestic law
• Selecting a legal basis for the exchange of information
• Entering into Competent Authority Agreements
• Protecting confidentiality and safeguarding data
• Making effective use of the information
• Putting in place the related administrative resources and required IT infrastructure
• Developing secure, effective and common transmission systems
• Measuring impact
• Voluntary disclosure initiatives
Slide 15
17.12.2014. OECD Common Reporting Standard (CRS)
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17.12.2014. OECD Common Reporting Standard (CRS)
Slide 16
OECD CRS expected account due diligence and reporting timeline including the revised DAC
Dec 2015
Expectation that EU Member
States adopted the revised DAC
Dec 2014 EU legislation expected to encompass the CRS
2018 2017 2016 2015 2014
Political Milestones
Account Due Diligence
Reporting
2013
Apr 19, 2013 G20 countries mandate the OECD to develop the Common Reporting Standard (CRS)
Jul 21, 2014 Release of final CRS/
CAA, Commentary and XML data
schema
Sep, 2014 •OECD formally presents the CRS to G20 finance ministers (endorsement) •EU Commission proposes amendment of the DAC, which shall also include the CRS
Dec 31, 2015 Cut-off date for pre-
existing accounts; eventually already collecting account
balances or other data
Jan 01, 2016 New account opening procedures in place
Dec 31, 2016 Due diligence
procedures must be completed for pre-existing high value
accounts
Dec 31, 2017 Due diligence
procedures must be completed for all other pre-existing accounts.
Sep 30, 2017
Initial automated ex-change of new
accounts and pre-existing high value
accounts excl. gross proceeds between
governments
Sep 30, 2018 Reporting shall
include all (low and high value) reportable
accounts and gross proceeds between
governments
Jan 01, 2016 Anticipated “Big Bang” start date for “Early Adopter” countries. All 28 EU Member States have committed as Early Adopters to implementation of revised DAC1
31 July 2015 EU publishes list of entities / accounts treated as non-reporting or excluded Oct 2014
•OECD Global Forum conference in Berlin including a signing
ceremony regarding CRS agreements
•ECOFIN approves adapting the DAC to include the CRS
OECD CRS Milestone Revised DAC Milestone 1In the case of Reporting Financial Institutions located in Austria, all references may be delayed by
one year
Phasing-in of other countries
Fast approaching deadline!
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CRS and IGA status across Jurisdictions - as of 10 December 2014
Signed
CRS Early Adopters New Procedures 2016 Reporting 2017
CRS Committed New Procedures 2017 Reporting 2018
CRS Committed Timeline TBD
Non-CRS
Sig
ned
IG
A
• Barbados • Belgium • Bermuda • British Virgin Islands • Bulgaria • Cayman Islands • Chile • Cyprus • Czech Republic • Denmark • Estonia • Finland • France • Germany • Gibraltar • Guernsey • Hungary • Ireland • Isle of Man
• Italy • Jersey • Latvia • Liechtenstein • Lithuania • Luxembourg • Malta • Mauritius • Mexico • Netherlands • Norway • Poland • Slovenia • South Africa • Spain • Sweden • Turks and Caicos
Islands • United Kingdom
• Austria • Australia • Bahamas • Brazil • Canada • Costa Rica • Japan • Hong Kong (China) • Israel • New Zealand • Singapore • Switzerland
(none) • Honduras • Jamaica • Moldova
Ag
reed
in
Su
bst
an
ce I
GA
• Anguilla • Colombia • Croatia • Curaçao • Dominica • Greece • Greenland • Iceland • India • Montserrat
• Portugal • Romania • San Marino • Seychelles • Slovak Republic • South Korea • Trinidad and Tobago
• Antigua and Barbuda
• China • Grenada • Indonesia • Macao • Malaysia • Qatar
• Saint Kitts and Nevis
• Saint Lucia • Saint Vincent
and Grenadines • Saudi Arabia • Turkey • United Arab
Emirates
• Bahrain • Panama
• Algeria • Angola • Armenia • Azerbaijan • Belarus • Cabo Verde • Cambodia • Dominican
Republic • Georgia • Guyana • Haiti • Holy See • Iraq • Kazakhstan
• Kosovo • Kuwait • Montenegro • Nicaragua • Paraguay • Peru • Philippines • Serbia • Taiwan • Thailand • Tunisia • Turkmenistan • Ukraine • Uzbekistan
No
n-I
GA
• Argentina • Faroe Islands
• Niue • Uruguay
• Albania • Andorra • Aruba • Belize • Brunei
• Marshall Islands • Monaco • Russia • Samoa • Sint Maarten
• Cook Islands • Nauru • Vanuatu
(all other jurisdictions)
Slide 17
17.12.2014. OECD Common Reporting Standard (CRS)
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Approach in other countries
Due to the tight deadlines little time is devoted to mutual coordination across participating countries and within the industry. There is a high probability for a diverging interpretation.
1. Consultations with the industry
2. Compliance assurance mechanisms: - New types of penalties; - Penalties for failing to provide a
declaration; - Penalties for systematic violations.
3. Cooperation among countries: - European Union; - Other countries.
Slide 18
17.12.2014. OECD Common Reporting Standard (CRS)
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What is the aim of the EU Directive on Administrative Cooperation (DAC) and how does it affect financial institutions?
Slide 19
17.12.2014. OECD Common Reporting Standard (CRS)
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EU DAC
Inclusion of CRS in EU legislation:
• Council Directive amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation;
• CRS text as Annex I;
• Annex II – separate explanatory rules from CRS commentaries;
• 31 December 2015 – implementation deadline;
• 1 January 2016 –National Laws coming into force;
• Austria receives one-year implementation relief.
Recital (13) In implementing this Directive, Member States should use the Commentaries on the Model Competent Authority Agreement and Common Reporting Standard developed by the OECD as a source of illustration of interpretation and in order to ensure consistency in application across Member States.
Slide 20
17.12.2014. OECD Common Reporting Standard (CRS)
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Impact on the activities of Financial Institutions
• Local lists of Non-Reporting Financial Institutions
• Entity that presents a low risk of being used to evade tax
• Procedure on new account opening applicable to new clients
• Pre-existing account – any Financial Account of a pre-existing client regardless of the date such account was opened (conditions apply)
• Cut-off dates for new clients/ pre-existing clients
• However, monitoring of changes in circumstances:
• Tax residency status; • account balances
(high/low value)
• Local list of Excluded Accounts
• Account that presents a low risk of being used to evade tax
Slide 21
17.12.2014. OECD Common Reporting Standard (CRS)
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CRS vs. FATCA
Slide 22
17.12.2014. OECD Common Reporting Standard (CRS)
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Expanded requirements under the CRS will result in significant implementation efforts in general
Slide 23
17.12.2014. OECD Common Reporting Standard (CRS)
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Variations in the definitions and scope under the CRS requires higher compliance efforts
Scope & Governance
The definition of a Financial Institution is broadly unchanged, however, subject to local implementation / variations
Not all definitions and types of Non-Reporting Financial Institution under the CRS correspond to the ones of the Model I IGA; certain Financial Institutions are in scope that are exempted under FATCA (e.g. local FIs)
Not clear how local legislator can exclude further “low risk entities and products”
Passive NFE definition widened: certain Investment Entities are in scope when located in a non-participating jurisdiction that would generally qualify as FIs under FATCA (deviating classification between FATCA and CRS)
No compliance and non-compliance concept for Financial Institutions
o No determination of an Expanded Affiliated Group (EAG) and limited FFIs/limited branches but for Related Entities
o No punitive taxation on NPFFIs
o Usage of GIIN or other identification numbers possible, no further registration of the Financial Institution
o No ongoing compliance certification towards competent authorities including an appointment of a Responsible Officer
o No documentation of FI status towards business partners / withholding agents
Tax authority approach to compliance yet to be determined
Allowance of 3rd Party Providers to fulfill reporting and due diligence requirements
Minor
Efforts
Significant
Efforts
Expected efforts
to implement into current operations
Slide 24
17.12.2014. OECD Common Reporting Standard (CRS)
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The number of clients to be reviewed will substantially increase under the CRS
Customer Due Diligence
General Account Due Diligence
Number of clients to be reviewed substantially increases
Threshold exemptions only exist for pre-existing entity accounts ($250,000) and not for individuals; distinction between low & high value accounts (> $1,000,000)
Focus on tax residency instead of citizenship
Removal of “regularly traded” exemption financial accounts definition – large potential impact on investment trusts, ETFs etc.
Deviating definition of a passive NFE in comparison to FATCA
Procedures required to (I) ensure a relationship manager identifies any change in circumstance and (II) enables a manual aggregation of accounts he knows or has reason to know
Simplified indicia check: place of birth omitted, standing instructions in conjunction with a deposit account are no longer an indicia
Preexisting Account Due Diligence
“Simplified” determination of a pre-existing client’s tax residency by residence address test based on current documentary evidence
If a pre-existing low value account becomes a high value account or a pre-existing entity account initially below $250,000 exceeds such value at the end of subsequent years, FI has a 1-year period to apply the due diligence procedures (IGA grants only 6 months)
New classification of “undocumented accounts” and revival of “dormant accounts”; annual enhanced review procedures
Annual re-application of relationship manager inquiry on high value accounts
New “Reasonable Efforts” procedure to retrieve a TIN or date of birth if missing
New Account Due Diligence
For new individual and entity accounts a self-certification is mandatory on account opening, if no other valid self-certification exists
Requirement to collect and maintain a TIN and date of birth for account holders of a reportable jurisdiction
Minor
Efforts
Significant
Efforts Expected efforts to
implement into current operations
Slide 25
17.12.2014. OECD Common Reporting Standard (CRS)
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Reporting
FIs should report to local authorities, who will exchange the data with partner jurisdictions
The number of partner jurisdictions with which to exchange information increased significantly
While CRS sets out data elements to be reported, jurisdictions may take the opportunity to request additional
information (wider approach, e.g., reporting may include domestic customers)
The CRS XML Data Scheme is conceptually based on the FATCA XML Data Schema, however, various
differences exist; additional data items: “place of birth” and “jurisdiction of residence”
Place of birth does not have to be reported if 1) it is not existing in the data of the FI 2) or it does not have to be
reported according to the respective partner country legislation (not a required item under FATCA)
TIN and date of birth not to be reported if 1) not existing in the data of the FI, and 2) are not required to be
collected according to domestic law
Gross proceeds must not be included in initial reporting (phasing-in possible; tbc in practice)
Controlling persons of passive NFEs that are located in a reportable jurisdiction have to be
reported, even when they are resident in the same reportable jurisdiction as the passive NFE
On closed accounts only the information of such closure needs to be reported (no balances)
Every tax residency has to be reported (multiple tax residencies = one file, multiple
addressees)
Balances and/or values of jointly held accounts shall be fully attributed to each of the
account holders
No transitional reporting regarding payments made to NPFFIs
Reporting will be more complex and burdensome due to the increased number of reportable jurisdictions
Minor
Efforts
Significant
Efforts Expected efforts to
implement into current operations
Slide 26
17.12.2014. OECD Common Reporting Standard (CRS)
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The only relieved area – withholding is not required under the CRS
Withholding
No withholding on payments from certain income sources, including the identification and classification of withholdable payments, affected clients and business divisions
No payee-concept including a detailed analysis for special products (e.g. syndicated loans) or counterparties
Concept of non-participating financial institutions does not exist
No connection to the Qualified Intermediary regime including the determination of dividend equivalent payments (871(m))
Minor
Efforts
Significant
Efforts Expected efforts to
implement into current operations
Slide 27
17.12.2014. OECD Common Reporting Standard (CRS)
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Expanded requirements under the CRS will result in significant implementation efforts in general
Customer Due Diligence
• Number of clients to be reviewed substantially increases (e.g. due to deletion of de-minimis-thresholds for individual clients)
• CRS focuses on tax residency, not citizenship
• Various due diligence procedures for pre-existing and new accounts exist; existing AML/KYC procedures may be used
• "Simplification" of indicia test
• New concept of "undocumented accounts" and revival of "dormant accounts"
• Requirement of "Reasonable Efforts"
Scope & Governance
• Though the definition of a Financial Institution is broadly unchanged, local deviations may apply
• Certain FIs exempted under FATCA (e.g. local FIs) are expected to be in scope
• Passive NFE definition widened to include certain Investment Entities
• No Responsible Officer concept foreseen
• Usage of GIIN possible
• Tax authority approach to compliance yet to be determined
Withholding
• There is no withholding under CRS
• No payee concept foreseen requiring a detailed analysis of products/payees
• Concept of non-participating institutions does not exist
• No interaction to the Qualified Intermediary regime including the provision of "Dividend Equivalent Payments" (871 (m))
Reporting
• FIs should report to local authorities, who will exchange the data with partner jurisdictions
• Reporting is expected to be based on FATCA data schema and elements, however, attributes may vary
• While CRS sets out data elements to be reported, jurisdictions may take the opportunity to request further information (“wider approach”)
CRS Efforts
FATCA Efforts
Slide 28
17.12.2014. OECD Common Reporting Standard (CRS)
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Implementation of FATCA and OECD CRS must run in parallel U
S F
AT
CA
2015 2016 2017
OE
CD
CR
S
30.09.2017:
First full reporting (reporting year 2016)
30.09.2016:
2nd year reporting additionally includes
payments to NPFFIs (reporting year 2015)
30.09.2015:
Initial reporting between governments
(reporting year 2014)
Basic account and account holder information
Basic account and account holder information
+ Certain income payments
Basic account and account holder information
+ Certain income payments
+ Gross proceeds
30.09.2017:
Initial reporting between governments
(reporting year 2016; + data end of 2015)
30.09.2018:
First full reporting (reporting year 2017)
Basic account and account holder information
+ Certain income payments
Basic account and account holder information
+ Certain income payments
+ Gross proceeds
3 P
ha
ses
2 P
ha
ses
2018
New Account Opening Procedure must be in
place for “Early Adopter” countries
Slide 29
17.12.2014. OECD Common Reporting Standard (CRS)
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The indicia check was eased compared to the FATCA Model I IGA, however, the varying requirements need to be applied
# FATCA Model I IGA CRS
1. Identification of the account holder as a U.S. citizen or resident
Identification of the Account Holder as tax resident in a reportable jurisdiction
2. Unambiguous indication of a U.S. place of birth n/a
3. Current U.S. mailing or residence address (including a U.S. post office box or U.S. “in-care-of” address)
Current mailing or residence address (including a post office box, “in-care-of” or “hold mail” address) in a reportable jurisdiction
4. Current U.S. telephone number One or more telephone numbers in a reportable jurisdiction and no telephone number in the jurisdiction of the reporting FI
5.
Standing instruction to transfer funds to an account maintained in the U.S.
For accounts that are not Depository Accounts the Reporting Financial Institution must also review electronically searchable data maintained by them for standing instructions to transfer funds to an account maintained in a reportable jurisdiction
6. Current effective power of attorney or signatory authority granted to a person with a U.S. address
Currently effective power of attorney or signatory authority granted to a person with an address in a reportable jurisdiction
7. An ‘in care of’ or ‘hold mail’ address that is the sole address the FI holds for the account holder.
An ‘in care of’ or ‘hold mail’ address that is the sole address the Financial Institution holds for the account holder.
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17.12.2014. OECD Common Reporting Standard (CRS)
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Challenges and solutions
Slide 31
17.12.2014. OECD Common Reporting Standard (CRS)
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Where do we find the greatest complexity within CRS as a result of global operations?
Regulatory Complexity
• Lack of alignment between IGAs now, could be worse under CRS
• Local laws require local expertise, which is a cost driver
• Incorporation of late adopters
• System of penalties
Data Management
• Difficulty implementing uniform processes for data collection
• CRS should impact all customers and local FIs
• Data privacy / security
Communication
• Disclosure to clients regarding reporting
• Internal communication
• Responding to tax / self-disclosure questions from clients
• Client on-boarding process
Reporting
• Various reporting channels
• Multiple reporting deadlines
• Difficulty in centralizing reporting function
Slide 32
17.12.2014. OECD Common Reporting Standard (CRS)
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Where do we find the greatest complexity within CRS as a result of global operations?
Where do you see the biggest difficulties with implementing a response to CRS?
Source: Registration survey from European Customer and Investor Tax Transparency Conference (Frankfurt, 3 – 4 November 2014)
2%
5%
3%
5%
10%
12%
16%
47%
0% 10% 20% 30% 40% 50%
Other
Adhering to timelines
Legal Entity Analysis
Implementing reporting
Adjusting onboarding procedures
Due Diligence for pre-existing Ahs
Implementing a global compliance program
Understanding and coordination of local lawimplications
% of respondents
Slide 33
17.12.2014. OECD Common Reporting Standard (CRS)
PricewaterhouseCoopers SIA
Where do we find the greatest complexity within CRS as a result of global operations?
Where do you see the biggest relief in CRS as opposed to FATCA?
3%
3%
7%
12%
3%
22%
53%
0% 10% 20% 30% 40% 50% 60%
Other
Adhering to timelines
Due diligence for pre-existing account holders
Adjusting onboarding procedures
Implementing reporting
Implementing a global compliance program
No withholding
% of respondents
Slide 34
17.12.2014. OECD Common Reporting Standard (CRS)
Source: Registration survey from European Customer and Investor Tax Transparency Conference (Frankfurt, 3 – 4 November 2014)
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CITT Compare Tool PwC’s response to managing multinational complexity
1 Identifying the issues
2 Creating a solution
3 Demonstration of the CITT Compare Tool & CITT Gateway
17.12.2014. OECD Common Reporting Standard (CRS)
Slide 35
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What are the issues that financial institutions with global operations face?
Various Sources of Information - US Treasury - OECD - Local Authorities
Local Language
Different users with
varying needs
Frequent regulatory changes
17.12.2014. OECD Common Reporting Standard (CRS)
Slide 36
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Creating a solution for these issues requires coordination of a global network
Global Network
Up-to-date Information
Delivery Capabilities
IGAs are signed or considered to be in effect with over 100 countries
52 countries have already signed the CRS MCAA
Local laws will dictate implementation requirements
Global Network
The only constant within these projects is change
Alerts to users after information has been released & for system updates to reflect changes
CITT_Feedback e-mail address
Up-to-date information
Executive Report
Status Report
Standardized Reports
Create your own Report
Delivery capabilities
17.12.2014. OECD Common Reporting Standard (CRS)
Slide 37
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The PwC CITT Gateway and Compare Tools will help you navigating through multinational complexities…
17.12.2014. OECD Common Reporting Standard (CRS)
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PricewaterhouseCoopers SIA Page 39
17.12.2014. OECD Common Reporting Standard (CRS)
Closing Remarks
52 countries have signed the MCAA
Guidance will be coming soon, but timelines are still
tight
Global trends impact your
business models and shall drive your
response to regulation today
It is manageable but you should start
assessing impacts now
The new tax transparency is
pushing tax authority functions to financial services
industry
Thank you
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