On 21 July 2014, the Organisation for Economic
Cooperation and Development ("OECD") released the full
version of the Standard for Automatic Exchange of Financial Account
Information in Tax Matters ("the Standard"), which was
approved by the OECD Council on 15 July 2014. The Standard calls on
governments to obtain detailed account information from their
financial institutions and exchange that information automatically
with other jurisdictions on an annual basis. The Standard sets out
the scopes of financial information to be reported, the financial
institutions that need to report, the different types of accounts
and taxpayers covered, as well as common due diligence procedures
to be followed by financial institutions. In addition, the OECD has
recently published the first edition of the Common Reporting
Standard ("CRS") Implementation Handbook in August 2015
to provide practical guidance to assist government officials in the
implementation of the Standard.
In this tax flash, we aim to provide you with updates and
summarize the key points of the Standard.
1. STANDARD FOR AUTOMATIC EXCHANGE OF FINANCIAL ACCOUNT
Under the Standard, jurisdictions would obtain financial
information from their financial institutions and automatically
exchange that information with other jurisdictions on an annual
basis. The Standard consists of two components:
a) Common Reporting and Due Diligence Standards (CRS); and
b) The Model Competent Authority Agreement (CAA).
The CRS contains the reporting and due diligence rules designed
with a broad scope across three dimensions:
- The financial information to be reported, including balances,
interest, dividends, sales proceeds from financial assets;
- The financial institutions that need to report, including
banks, custodians, brokers, certain collective investment vehicles
and certain insurance companies; and
- Types of accounts and taxpayers covered, including accounts
held by individuals and entities (covering trusts and
The Model CAA contains the detailed rules on the exchange of
information dealing with definitions, covering the types of
information to be exchanged, the time and manner of exchange and
the confidentiality and data safeguards that must be respected.
Please find more details of the Standard in the link below:
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