Published 8 December 2020
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Automatic Exchange of Information (AEOI) under the Common Reporting Standard (CRS) and the United States Foreign Account Tax Compliance Act (FATCA) involves the exchange of large amounts of information on financial accounts between tax administrations. For the receiving tax administration to be able to use this information effectively requires both the sending administration and all Financial Institutions (FI) to have sufficiently robust due diligence and reporting processes in place.
The purpose of this compliance guide is to assist government officials and financial institutions regarding the obligations to monitor and ensure compliance with reporting obligations under CRS and FATCA. It also provides a practical overview of what a robust compliance regime may involve. The guide is divided into two parts:
Part I looks at the initiatives that tax administrations may wish to consider to promote and support compliance by FIs with their CRS obligations including education, service initiatives, the development of self-help tools and options for the identification of the FI population.
Part II sets out different areas that could be used to review and assess compliance with the CRS and FATCA requirements by FIs, such as governance and implementation; due diligence obligations; and reporting requirements.
The guide was drawn up with the assistance of a pilot group of tax administrations from Canada, Singapore, the United Kingdom and the United States of America.
The purpose of the guide is not to be prescriptive. There are many approaches through which FIs can achieve a compliant outcome based on their internal systems and risk factors. Equally, tax administrations will have differing approaches to risk assessment and as to how they interact with their FIs.