STANDARD FOR AUTOMATIC EXCHANGE OF FINANCIAL ACCOUNT INFORMATION IN TAX MATTERS
The Standard for Automatic Exchange of Financial Account Information in Tax Matters (also known as the “Common Reporting Standard” or “C.R.S.”) is a global system of automatic exchange of information for tax purposes (“A.E.O.I.”). As of January 1, 2016, financial institutions (“F.I.’s”) in jurisdictions that have signed up as members of the Early Adopters Group (“E.A.G.”) of the C.R.S. are obligated to gather identification and residence information from new account holders to pass it to their jurisdictions’ reporting authority in order to enable reporting of the accounts. By 2018, the 96 jurisdictions that have adopted the C.R.S. will be exchanging information on those account holders identified as reportable between their respective reporting authorities. F.I.’s and tax authorities still need to work through all the details, but below is a brief introduction to the system, how it is expected to work, and some potential pitfalls.
This article by Richard Addlestone appears as a guest feature in Ruchelman PLLC Insights January 2016 edition. To read the full article Click Here to Download