The Common Reporting Standard (CRS) is a standard introduced for the automatic exchange of financial accounting information through XML format. The reporting standard is heavily based on USA’s Foreign Account Tax Compliance Act (FATCA) and includes various alterations that allows governing countries to accommodate slight variations.
CRS obliges institutions to:
i. identify and collect information on customer’s tax residencies
ii. provide reporting on financial account data related to those customers which are tax residents on reportable jurisdictions, to the local tax authority.
The data collected by the tax authority is then exchanged with the pertinent tax authorities in participating countries. Therefore, credit and financial institutions in participating countries such as Malta, are obliged to comply with CRS requirements.
Reporting institutions are obliged to review their financial accounts and apply due diligence practices, in order to identify accounts and report to the national authority accordingly. The following information must be reported by the institutions:
• Name, Address, Country of Nationality, Taxpayer Identification Number (TIN)
• For individuals, to report date of birth, while entities are to report each controlling person who is reportable
• Depending on the type of account, provide values such as balance, accrued interest, interest paid / credited, dividends and other income
The BRSANALYTICS CRS conversion tool provides an easy template for reporting institutions to fill in their reportable customer details, and with the click of a button, convert this into the XML format required by the local tax authority (Inland Revenue Department), allowing reporting agents to focus on the business needs rather than the technical reporting specifications