CRS – More Countries, More Documentation, More Reporting

CRS Reporting Obligations and Increased Documentation

On 5 January 2022, the Organization for Economic Cooperation and Development (OECD) published an updated list of countries committed to collecting self-certification and the Automatic Exchange of Information (AEoI) Reporting. Up until 2021, 108 countries adopted the protocol and thus fell in scope to exchange information related to offshore investment. At the beginning of 2022, 4 more countries have been added to the list with an additional 9 set to implement the requirement in 2023 and 2024.

The OECD developed a global common reporting standard (CRS) for the automatic exchange of financial account information, using a similar approach as FATCA. CRS requires FFIs residents in a participating jurisdiction to identify and report any tax residents or reportable accounts on an annual basis.

CRS was advocated by G20 and currently has 121 countries signed up and committed to complying with the international standard of exchanging information under CRS. FFIs in CRS adopter countries will need to ensure that they stay up to date with the list of participating jurisdictions, as they’re obligated to report their account holders from all of these participating countries. 

Updated list of participating CRS jurisdictions in 2022

Below is the committed list of countries by year of first information exchange. For a complete list of countries please visit the OECD website AEOI commitments (oecd.org)

JURISDICTIONS UNDERTAKING FIRST EXCHANGES BY 2022 (4)

• Jamaica, Kenya, Maldives, Morocco

JURISDICTIONS UNDERTAKING FIRST EXCHANGES BY 2023 (6)

• Jordan, Moldova, Montenegro, Thailand, Uganda, Ukraine

JURISDICTIONS UNDERTAKING FIRST EXCHANGES BY 2024 (3)

• Georgia, Rwanda, Tunisia

Non-Compliance with FATCA & CRS

Non-compliance with FATCA and CRS reporting regulations can lead to serious commercial, reputational and financial risk. Failure to maintain appropriate documentation on financial accounts, failure to report information or submit FATCA and CRS filings by the deadlines, or inaccurate reporting on reportable accounts may all result in penal consequences including withholding and financial penalties.

Fines can range from USD 2,800 up to USD 70,000 depending on the type of contravention, with additional administrative penalties being applied for every day of failure to comply. These non-compliance penalties are usually drafted and enforced by local tax authorities, therefore are specific to each country.

Implications of non-compliance go beyond financial fines and can lead to significant reputational risk. In some cases, tax authorities may publish cases of non-compliance with FATCA and CRS regulations, leading to naming and shaming in the industry and media. This objectively may have a longer-lasting impact on a financial institution than any of the financial penalties.

How can TAINA help?

The rise in OECD enforcement and CRS Compliance tax authority reviews paired with the ever-changing legislation around CRS has further increased the risk for financial institutions. Making it more important now than ever to address your CRS validation process. The TAINA Platform takes care of your CRS tax report and compliance in a seamless end-to-end process whilst maintaining an up to date, robust and detailed CRS ruleset. 

TAINA’s fully-automated FATCA and CRS Validation Platform can help financial institutions lighten their compliance burden and prove their FATCA and CRS compliance whilst improving efficiency, reducing cost, mitigating risk and improving their overall customer and investor experience.

Using our flexible and lightweight platform you can automate and streamline your FATCA and CRS validation process whilst ensuring you have good year-end data that will result in clean FATCA and CRS reporting to tax authorities all year round.

We would love to talk to you more about your current documentation validation process and how our award-winning FATCA and CRS Validation platform may add value to your organisation.

For more information on how our fully automated FATCA and CRS Validation platform can add value to your business, get in touch or request a demo to see it in action.