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Common Reporting Standard (CRS) was given Royal Assent on the 18th March 2017 and implemented by all Australian Financial Institutions from 1 July 2017, facilitated by the Australian Taxation Office (ATO).

A global initiative by the Organisation for Economic Co-operation and Development (OECD) to combat tax evasion and provide greater transparency for local tax agencies. On international financial information for individuals and entities.

Why has the Common Reporting Standard (CRS) been introduced?

CRS has been introduced to implement a standard collection, reporting, and exchange of financial information on foreign tax residents.

A uniformed approach, for financial institutions and tax jurisdictions, to report relevant information for tax purposes in a consistent format.

Who and what data will be collected?

Australian financial institutions such as banks and other deposit-taking institutions, custodial institutions, investment entities, and specified insurance companies are required to report under the CRS.

The information collected and reported includes name, Foreign Tax Identification Numbers (TINs), interest income, dividend income, account balance, and other transactions relating to that account.

Who does this apply too?

Individuals living overseas

Information required by financial institutions, can include

  • All countries of tax residency
  • Foreign Tax Identification Numbers (TINs) – where applicable
  • If a TIN cannot be provided; a reasonable explanation as to why
  • Declarations to certify that all information provided is true and correct

Business entities overseas

Information required to by financial institutions, can include

  • All countries of tax residency
  • Foreign Tax Identification Numbers (TINs) – where applicable
  • If a TIN cannot be provided; a reasonable explanation as to why
  • Tax Residency Status
  • Declarations to certify that all information provided is true and correct

Does the United States have something similar in place?

The U.S in 2010 enacted the Foreign Account Tax Compliance (FATCA) provisions. This provision is for United States persons (and those living outside of the United States) to file a yearly report on their non-U.S. financial accounts to the Financial Crimes Enforcement Network (FinCEN).

There are terminology differences between the FATCA provision and the CRS reporting requirements. To understand in greater detail, please click on the following link.

I am an Australian living overseas, what does that mean for me?

This is now enacted as law and will be requested from Australian Financial Institutions when you go to open a bank account or a new financial account. Non-compliance can result in penalties and cause delays and issues with the service provided.

How does this impact my mortgage as an Australian expat?

If you are applying for an Australian mortgage as an expat. This could be for the purchase of new investment property or for the refinance of an existing loan.

There will be a requirement from the Australian lender to make your TIN declaration. This is at the stage of setting up the new financial account as part of the application process.

If you are living in a jurisdiction that does not provide a TIN, you can file for an exemption.

This article was originally published: Read here