Common Reporting Standard
The Organisation for Economic Co-operation and Development’s (OECD) Common Reporting Standard (CRS) sets forth a globally-coordinated approach to the disclosure of information regarding income earned by individuals and organisations.
CRS is the result of extensive work from the OECD, the G20 and the European Union in the area of automatic exchange of information and anti-money laundering. CRS draws heavily on the Foreign Account Tax Compliance Act (FATCA) and related Inter Governmental Agreements having acted as a catalyst for the move towards the automatic exchange of information in a multilateral context.
CRS has been live since 1 January 2016 in “early adopters” jurisdictions, among which Luxembourg and Germany, where Financial Institutions have started to collect data on new account opening for the first information exchange in 2017. Other jurisdictions will join CRS with a one year delay, undertaking the first exchange of information in 2018.
Scope of CRS
CRS defines new reporting and KYC/AML rules for Financial Institutions.
Financial institutions covered by CRS include custodial institutions, depository institutions, investment entities and specified insurance companies unless they qualify as low risk institutions (low risk of being used for tax evasion).
The financial information to be reported with respect to reportable accounts are largely consistent with the information to be reported under FATCA and includes interest, dividends, account balance or value, income from certain insurance products, sales proceeds from financial assets and other income generated with respect to assets held in the account or payments made with respect to the account.
Reportable accounts include accounts held by individuals and entities who are residents of a CRS signatory jurisdiction unless specially excluded from the definition. Additionally, CRS includes a requirement to look through Passive Entities to report on the relevant controlling persons.
Clearstream is committed to the implementation of CRS.
Clearstream Banking S.A. (CBL) and Clearstream Banking AG (CBF) are classified as Financial Institutions under CRS with country of tax residence as Luxembourg for Clearstream Banking S.A and Germany for Clearstream Banking AG.
Please refer to the related “Entity tax residency self-certification form” of Clearstream entities attached below.
Clearstream as service provider
As a reporting Financial Institution, Clearstream requires newly on-boarded customers to complete CRS self-certification forms as part of the account opening process.
Certain pre-existing customers (having an account with Clearstream prior to 1 January 2016) will also have to self-certify for CRS purposes. Impacted customers will be contacted in due time.
The first reporting to the Luxembourg and German tax authorities will take place in June 2017 for the reporting year 2016.
The OECD maintains and regularly updates a list of CRS-related Frequently Asked Questions.