The Common Reporting Standard (CRS) is the standard for the automatic exchange of financial account information produced by the OECD, which provides for exchange of client due diligence (CDD) information between various jurisdictions. CRS is similar to the US Foreign Account Tax Compliance Act (FATCA). It is a requirement for financial institutions (Reporting FI) to report to the local authority – the International Tax Authority (ITA). The ITA will be the repository of all of the reported information and will exchange CDD information under CRS (and FATCA) with the equivalent authorities in the Jurisdictions. The first reporting under CRS is scheduled for 31 May 2017.

FATCA was implemented on 23 October 2014 under the Mutual Legal Assistance (Tax Matters) Order 2014 as subsidiary legislation to the Mutual Legal Assistance (Tax Matters) Act 2003 (MLAT). On 4 June 2015, the Mutual Legal Assistance (Tax Matters) Order 2015 was implemented to give effect to identify financial accounts, the reporting obligations of Reporting FIs under FATCA, appointment of third parties, information on inspection and compliance, the offences for non-compliance, and the guidance notes.

CRS was implemented on 31 December 2015 as the Mutual Legal Assistance (Tax Matters) (Amendment) (No. 2) Act 2015 (CRS Law). The CRS Law is subsidiary legislation to the MLAT.

This article was originally published in China Business Law Journal in February 2017, click here to access.

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