Insight

Explanation of the Common Reporting Standards (CRS)

Helping our clients stay compliant The Common Reporting Standards has been implemented by over 90 jurisdictions, including Jersey with effect from 1/1/16.

The Common Reporting Standards has been implemented by over 90 jurisdictions, including Jersey with effect from 1/1/16. The first exchanges of information occurred in 2017 based on the information from 2016 with the first reporting deadline for Jersey being 30/6/17.

Purpose

The purpose of the CRS is to prevent cross-border tax evasion by highlighting financial accounts in other jurisdictions which have not previously been reported to the tax authorities. If you are fully compliant with regard to your tax reporting, there is no need to be concerned. If you have any doubt about whether you are compliant, we recommend that you see a tax specialist to remedy the situation.

Who does it apply to?

All entities including trusts, companies and partnerships with financial accounts existing in a CRS-compliant jurisdiction need to ensure that CRS reporting is done for all account holders in the respective CRS-compliant jurisdiction.

What does this mean for our clients?

Bond Trust is obliged to report all relevant information to The Comptroller of Taxes in Jersey, who will then share such information with the relevant tax authorities in a CRS-compliant jurisdiction, regarding any of our clients that are financial account holders in the respective CRS-compliant jurisdiction. We do this by asking our clients to complete a Self-Certification Form. Our existing clients will have already been asked to complete the form, providing us with information such as tax residency. New clients will be requested to complete the form during the take on process. It is important to note that the forms may be requested on an annual basis.

With regards to compliance measures, if a self-certification form has not been received by Bond Trust and you have not confirmed your tax residency, we are obliged to assess whether your account should be reported, erring on the side of caution by reporting to all possible relevant jurisdictions.

Where reportable, client financial information will be provided to the relevant tax authorities on an annual basis, in accordance with CRS.

What is reported?

Any interest in entities under our administration such as shareholders, partners (of a partnership), settlors, protectors, beneficiaries, trustees, enforcers, appointors and ultimate beneficial owners would be reported. Note that a report may be made on a person who does not receive benefit from an account ( e.g. a trustee or protector). This is because the report is not about triggering a tax liability in the jurisdiction in which you are a tax resident but instead it is intended to highlight a relationship with a financial account.

The information that will be reported includes identification information (name, address, tax residence and taxpayer reference as requested in the Self-Certification Form) and financial information (account balance and amounts paid during the relevant year):

Account balance

  • For companies, the account balance is the Net Asset Value based on the latest financial statements for the entity.
  • For Trusts it is determined by your relationship with the trust. The total value of the trust will be attributed to the settlor, trustee, protector.
  • Loans made to entities within the structure

Amounts paid

  • Dividends paid to shareholders,
  • Profits attributed to partners of a partnership
  • Distributions made to beneficiaries of a trust, including discretionary beneficiaries.

Hopefully this brief account provides for a helpful overview, however, again, should you have any doubt about whether you are compliant, we recommend that you see a tax specialist to remedy the situation.