The Tax Department after conducting on-the-spot and office audits to Financial Institutions (FIs) for examination of their compliance in relation to due diligence procedures as set out in the relevant legislation on CRS/DAC2, draws the attention of F.I. to the following:

1. The data declared in the CRS reports must be checked and confirmed both for their correctness and in that they are real (not forged) and in accordance with the specifications of XML Schema as well as relevant legislation governing CRS reporting. Particular attention should be paid to the data that customers themselves fill in electronically during self-certification. The F.I. must have the appropriate systems in place to ensure that the information provided belongs to the Account Holder.

2. The term 'undocumented account' as defined in the relevant legislation on CRS refers only to pre-existing accounts (which exist on 31/12/2015) and not in new accounts (which were opened after 1/1/2016).

3. In the process of due diligence of new accounts, the F.I. must proceed to close or freeze an account after the expiration of 90 days in in the event that a valid self-certification is not obtained.

In case of freezing of accounts, it is recommended that the F.I. indicate in additional file sent for each jurisdiction, in the "Warning" field that all accounts included in this file are frozen. In addition, it is recommended that the F.I. also indicate in the name of the file to be sent as relating to frozen persons accounts to avoid confusion with the file that will include their remaining accounts.

4. In XML Schema, the Tax Identification Number (TIN) field appears as Optional. This means that the TIN is mandatory to be reported for new accounts. For pre-existing accounts, the TIN is reportable to the extent (Optional) held by the F.I. It is noted that the F.I. must make reasonable efforts to collect the TIN before the end of the second calendar year following the year in which the account was registered as reportable. F.I. is requested to keep a record of the reasonable efforts it has made. It is recommended that F.I. visit the OECD website to confirm a valid TIN for each jurisdiction.

5. In XML Schema the "Address Fix" address field is used for all CRS reports, unless the F.I. does not have all of the details of the address of the account holder. However, in cases where in which the F.I. uses the form "Address Free", the City Field is mandatory and must be completed. Please note that this option should only be used when the data cannot be presented in the "Address Fix" format. The address should be as complete as possible in case all the details of the address are available at the F.I.

6. In XML Schema the 'date of birth' of the Account holder is reportable for all new accounts. With regard to Pre-existing Accounts, it is reportable only to the extent that the information is available in the records kept by the F.I..

7. In cases where the balance or value of an account is zero or a negative amount, the F.I. must indicate in the XML Schema the balance or value as zero.

8. In the case of a joint account, each co-beneficiary is treated as an account holder for the purposes of determining whether the account is a reportable account. An account is a reportable account if the account holders are reportable persons or a passive NFE with one or more controlling persons who are reportable persons. Where more than one reportable person is a co-beneficiary, each reportable person shall be treated as an account holder and the full balance or value of the joint account as well as the sum of the amounts paid or credited to the joint account shall be attributed.

9. In cases where F.I. ceases to operate and is deleted by the Competent Supervisory Authority to which it belongs as well as by the Registrar of Companies, it must request and deactivate its registration through the Government Internet Security Channel "Ariadne" of the fatca/CRS/DAC2 e-service so that its obligation to submit the relevant XML files ceases. It is noted that the deactivation of the registration by the Government Internet Security Channel "Ariadne" does not imply the automatic deactivation of the registration by the FATCA / CRS / DAC2 service. The F.I. should first request deletion from the FATCA/CRS/DAC2 e-service, and later, if it wishes, deletion from the Government Internet Security Channel "Ariadne".

10. Regarding the correct procedure for submitting FATCA/CRS files please note that:

  • For submissions up to 30 June relating to the immediately preceding tax year, only the last submission per country is considered and if it is valid it is forwarded to the country concerned.
  • For submissions relating to the immediately preceding tax year and made after 30 June, the last submission per country and per day is considered and if it is valid it is forwarded to the country concerned.
  • For submissions relating to past tax years, the last submission per country and per day is considered and if it is valid it is forwarded to the country concerned.

Finally, we would like to inform the F.I. that the Tax Department reserves the right to impose an administrative fine if it is found that the F.I. do not follow proper reporting and due diligence procedures as defined the relevant CRS/DAC2 legislation.

Source:Tax Department

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