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    Reporting Financial Institutions Are Defined As (Step 3)

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    Sanusi Jnr.
    The Common Reporting Standard (CRS) is an OECD standard for automatic exchange of financial account information between tax authorities. It requires jurisdictions to obtain information from financial institutions and exchange it annually with other jurisdictions. The CRS sets out what financial account information will be exchanged, which financial institutions and accounts are covered, and the due diligence procedures that financial institutions must follow. It consists of a model Competent Authority Agreement, the CRS itself, commentaries, and an XML schema user guide. The CRS defines which financial institutions are required to report and which accounts are considered financial accounts that need to be reviewed for reporting. It also defines certain excluded accounts that are low risk for tax evasion and do not need to be reviewed

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    Reporting Financial Institutions Are Defined As (Step 3)

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    Sanusi Jnr.
    6 views2 pages
    The Common Reporting Standard (CRS) is an OECD standard for automatic exchange of financial account information between tax authorities. It requires jurisdictions to obtain information from financial institutions and exchange it annually with other jurisdictions. The CRS sets out what financial account information will be exchanged, which financial institutions and accounts are covered, and the due diligence procedures that financial institutions must follow. It consists of a model Competent Authority Agreement, the CRS itself, commentaries, and an XML schema user guide. The CRS defines which financial institutions are required to report and which accounts are considered financial accounts that need to be reviewed for reporting. It also defines certain excluded accounts that are low risk for tax evasion and do not need to be reviewed

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    What is CRS

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    The Common Reporting Standard (CRS) is an OECD standard for automatic exchange of financial account information between tax authorities. It requires jurisdictions to obtain information from financial institutions and exchange it annually with other jurisdictions. The CRS sets out what financial account information will be exchanged, which financial institutions and accounts are covered, and the due diligence procedures that financial institutions must follow. It consists of a model Competent Authority Agreement, the CRS itself, commentaries, and an XML schema user guide. The CRS defines which financial institutions are required to report and which accounts are considered financial accounts that need to be reviewed for reporting. It also defines certain excluded accounts that are low risk for tax evasion and do not need to be reviewed

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    Download as docx, pdf, or txt
    6 views2 pages

    Reporting Financial Institutions Are Defined As (Step 3)

    Uploaded by

    Sanusi Jnr.
    The Common Reporting Standard (CRS) is an OECD standard for automatic exchange of financial account information between tax authorities. It requires jurisdictions to obtain information from financial institutions and exchange it annually with other jurisdictions. The CRS sets out what financial account information will be exchanged, which financial institutions and accounts are covered, and the due diligence procedures that financial institutions must follow. It consists of a model Competent Authority Agreement, the CRS itself, commentaries, and an XML schema user guide. The CRS defines which financial institutions are required to report and which accounts are considered financial accounts that need to be reviewed for reporting. It also defines certain excluded accounts that are low risk for tax evasion and do not need to be reviewed

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    What is CRS?

    The Common Reporting Standard (CRS), developed in response to the G20 request and approved by
    the OECD Council on 15 July 2014, calls on jurisdictions to obtain information from their financial
    institutions and automatically exchange that information with other jurisdictions on an annual basis.
    It sets out the financial account information to be exchanged, the financial institutions required to
    report, the different types of accounts and taxpayers covered, as well as common due diligence
    procedures to be followed by financial institutions.

    The Standard consists of the following four key parts:

    A model Competent Authority Agreement (CAA), providing the international legal framework for the
    automatic exchange of CRS information;

    The Common Reporting Standard;

    The Commentaries on the CAA and the CRS; and

    The CRS XML Schema User Guide

    Reporting Financial Institutions are defined as (Step 3):

    Depository Institutions

     Generally includes savings banks,


     commercial banks, savings and loan
     associations and credit unions

    Custodial Institutions

     Generally includes custodian banks,


     brokers and central securities
     depositories

    Investment Entities

     Generally includes Entities investing,


     reinvesting or trading in financial
     instruments, portfolio management or
     investing, administering or managing
     Financial Assets

    Specified Insurance companies

    Generally includes most life insurance companies

    Non-Reporting Financial Institutions

    1.  Governmental Entities, and their

    pension funds

    2. International Organisations
    3. Central Banks

    4. Certain Retirement Funds

    5. Qualified Credit Card Isuers

    6. Exempt Collective Investment

    Vehicles

    7. Trustee Documented Trusts

    8. Other low-risk Financial Institutions

    Accounts which are Financial Accounts and therefore need to be reviewed

    Reporting Financial Institutions are required to review the Financial Accounts they maintain to
    identify whether any of them need to be reported to the tax authority. There is a general rule to
    identify a Financial Account and the CRS then specifies certain types of Financial Accounts which are
    low risk of being used to evade tax and are therefore excluded from needing to be reviewed or
    reported (an Excluded Account).

    The general rule and the more specific categories

    The general rule is that a Financial Account is an account maintained by a Financial Institution. The
    CRS then further clarifies the definition to state that the term includes specific categories of
    accounts (Depository Accounts, Custodial Accounts, Equity and debt interests, Cash Value Insurance
    Contracts and Annuity Contracts). Figure 8 sets out the categories of Financial

    Excluded Accounts

    Certain Financial Accounts are seen to be low risk of being used to evade tax and are therefore
    specifically excluded from needing to be reviewed. These are called Excluded Accounts. These
    categories are also shown.

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