What is the Common Reporting Standard (CRS)?
The Common Reporting Standards (CRS) is a financial information standard that resulted from the G20 international forum and is intended to harmonize financial institutions’ reporting mechanisms across various jurisdictions.
The CRS is designed to thwart tax evasion and was inspired by, and based upon, the United States’ Foreign Account Tax Compliance Act (FACTA) legislation.
What accounts must be reported?
Each jurisdiction is obliged to share an agreed template of account information with the other countries that have implemented CRS. The format for the report is set out extensively in a 44 page document available on the OECD’s website.
Who has signed up for the report sharing mechanism?
154 countries acceded to the Global Forum on Transparency and Exchange of Information for Tax Purposes. A number of signatories have not yet implemented the required reporting. For practical purposes however, many of those countries which have are not signatories, or have not yet implemented CRS, participate in FACTA.
Additionally, the OECD has listed 43 developing countries — including some major tax havens, such as the Cayman Islands — which are not yet signatories. The United States has also not signed on, policy because it does not want to be bound by a non-FACTA reporting standard.