While the U.S. tax evasion-prevention law known as FATCA has been getting all the headlines lately – certainly here at the American Expat Financial News Journal – FATCA’s global counterpart, the OECD/G20 regime known as the Common Reporting Standard, has quietly been continuing to sign up new jurisdictions.
According to the Organisation for Economic Co-operation and Development, four countries have agreed since January to join the CRS Multilateral Competent Authority Agreement (CRS MCAA), bringing the total number of CRS signatories to 117.
These four new CRS signatories, in order of joining date, were Jamaica and Uganda (January 2022); Montenegro (June 2022); and Thailand (July 2022), according to the OECD.
Under the CRS/MCAA regime, in order for these jurisdictions to be able to collect the information they will be required to provide to other CRS signatories under the automatic information exchange agreement, they now will need to transpose into their domestic laws the requirements of the CRS. It is only after this is achieved that the first automatic information exchanges can begin to take place.
According to the current list CRS MCAA signatories, Jamaica is planning to begin exchanging information with other CRS signatories as of next month (September), while the other three newest signatories – Uganda, Montenegro and Thailand – are planning to do so a full year later, in September, 2023.
Obligation to ‘collect finance
info and exchange it’
Under the CRS, which was agreed by the OECD and G20 (Group of 20 Nations) in 2014, financial institutions located in countries signed up to the CRS, including banks, investment funds and insurers, are obliged to collect and automatically exchange with the authorities in other CRS countries the financial account information of individuals and entities – including their beneficial owners – who are officially tax-resident in any other CRS-member jurisdiction.
Jurisdictions that have now signed up to the CRS include virtually all of the world’s major economies as well as most of its specialist financial centers, including the Cayman Islands, Bermuda, Jersey, Guernsey, the Isle of Man, the British Virgin Islands and San Marino.
The U.S. is not a CRS signatory, however, nor are the U.S. overseas territories of Puerto Rico, American Samoa, Guam, the U.S. Virgin Islands and Northern Mariana Islands.
The U.S., as is often reported, has said that it doesn’t need to join the Common Reporting Standard because it already has its own regime for obtaining overseas bank and financial account information about its taxpayers, the so-called Foreign Account Tax Compliance Act (FATCA), which came into force in 2014, before the CRS was introduced.
Based in Paris, the OECD is an intergovernmental economic organization with 38 member countries. (Costa Rica was the last to join, which it did in May, 2021.) The OECD was founded in 1961 to, as its name implies, stimulate economic progress and development through enlightened cooperation and shared goals.
The U.S. and the OECD came to introduce FATCA and the CRS in the wake of a series of widely-publicized revelations of the use by high-net-worth and ultra-HNW Americans, as well as rich people of other nationalities, of banks and other financial institutions in certain foreign countries, to hide their wealth, to avoid having to pay taxes on it.
These included former UBS banker Brad Birkenfeld's disclosures, in around 2007.
Most recently, the OECD has, like the U.S. and certain other governments, been looking into ways to monitor the wealth transference taking place across the rapidly-growing, global cryptocurrency network.
As reported, it undertook a public consultation earlier this year which it said was aimed at informing the cryptocurrency industry of what it was considering proposing, as well as inviting them to comment on its proposals.
It is expected that the OECD will publish its response to this consultation later this year.
- UK's tax authority to reach out to 'hundreds' with possible links to bank in non-CRS-compliant Puerto Rico
- John Richardson: 'The CRS ≠ FATCA'
- OECD seeks input on a proposed 'tax transparency framework' for crypto-assets
- Dems Abroad Thailand: U.S. expat vets may get vaccines via their local 'VFW or American Legion' posts
- State Dept. reiterates U.S. policy not 'to distribute Covid vaccines to Americans overseas'