The OECD Common Reporting Standard
The Common Reporting Standard sets rules for financial account reporting and annual exchange between jurisdictions.
Scope of the CRS
CRS is the abbreviation for Common Reporting Standard, the reporting and due diligence component of the exchange framework. Due diligence means the procedures financial institutions follow to identify accounts subject to reporting.[1]
The terms that determine reporting
A Reportable Jurisdiction is an exchange destination identified in a published list and covered by an information agreement. The agreement must create an obligation to provide the information specified in Section I.[1]
A Reportable Jurisdiction Person generally means an individual or entity resident there under its tax laws. The definition also covers an estate whose deceased person was resident in that jurisdiction.[1]
A Reportable Person is a Reportable Jurisdiction Person subject to specified exclusions, including financial institutions and central banks. A Reportable Account includes an account held by such a person once the due diligence procedures identify it.[1]
How the framework is structured
The framework combines the CRS with a Model Competent Authority Agreement, abbreviated as Model CAA. Implementation requires domestic legislation translating the CRS into rules for financial institutions.[1]
The Model CAA connects the reporting standard to the legal instrument authorizing exchanges between jurisdictions. A bilateral tax treaty is one example of that legal foundation.[1]
Section I specifies reporting information, while Sections II through VII contain the due diligence procedures. Section VIII supplies definitions for the capitalized terms used throughout the CRS.[1]
Institutions and information covered
The financial institution definition covers custodial institutions, depository institutions, investment entities and specified insurance companies. The reporting definition excludes institutions classified as Non-Reporting Financial Institutions under the standard.[1]
Account reporting includes identifying information about the holder and the account number or its functional equivalent. It also identifies the reporting institution and states the account balance or value for the relevant reporting period.[1]
Income information depends on the account category, with depository accounts reporting the gross interest paid or credited. Each reported amount must identify its currency.[1]
How institutions establish tax residence
For individual accounts covered by Section IV, the institution obtains a self-certification when the account opens. This document establishes the holder's tax residence, and the institution checks its reasonableness against account opening information.[1]
A self-certification helps determine tax residence; an account is reportable if held by a Reportable Person or a Passive NFE with a Controlling Person who is a Reportable Person. The document also requires a birth date and taxpayer identification number, subject to the specified number exceptions.[1]
Entities and controlling persons
Entity accounts can fall within reporting, and trusts and foundations are included in this category. An NFE is an entity outside the Financial Institution definition.[1]
A Passive NFE includes an NFE that does not meet the Active NFE definition. Its account can be reportable when a controlling person is reportable and the due diligence procedures identify it.[1]
The connection to U.S. reporting
CRS is connected to FATCA through the intergovernmental approach used to implement that U.S. reporting framework. CRS draws extensively on that intergovernmental approach.[1]
U.S. citizenship taxation is one distinction between FATCA and CRS. Differences between FATCA reporting and CRS also reflect the multilateral structure of CRS.[1]
Questions and answers
Does CRS exchange information annually?
The standard calls for jurisdictions to exchange financial account information every year. Financial institutions supply the information that jurisdictions obtain for this exchange.[1]
Is a taxpayer identification number always reported?
The standard includes exceptions to taxpayer identification number reporting. A number is not required when the relevant jurisdiction does not issue one or its domestic law does not require collection.[1]
Can a trust have controlling persons under CRS?
The trust definition includes settlors and trustees among its controlling persons. It also covers beneficiaries or beneficiary classes, any protector, and other natural persons exercising ultimate effective control.[1]
Are CRS and FATCA reporting identical?
No, CRS and FATCA reporting differ in several respects. The differences reflect the multilateral character of CRS and U.S. citizenship taxation.[1]
Related resources
Related glossary terms
- Financial account (CRS): The Common Reporting Standard defines accounts at financial institutions, including deposit and custody accounts, plus equity and debt interests and insurance.
- Reportable account: The OECD standard defines a reportable account as held by a reportable person or certain passive entities, and identified through due diligence procedures.
- Reporting financial institution: The Common Reporting Standard classifies a financial institution as reporting when it falls within the relevant jurisdiction's rules and is not non-reporting.
Related articles and guides
- Due diligence and controlling persons of a trust: The CRS describes due diligence as account review by institutions to identify reportable accounts and information, including tests for entity accounts.
- How FATCA Account Information Is Reported: Foreign financial institutions report accounts connected to U.S. taxpayers on Form 8966. Reports can include foreign entities with substantial U.S. ownership.
- Cook Islands trust tax and reporting rules: Cook Islands trust legislation and revenue rules on tax information reporting, with the IRS reporting rules for a U.S. citizen with a Cook Islands trust.
Tools and official documents
- Foreign trust reporting role finder: Tick the roles that describe a connection to a foreign trust or foreign account to see the forms the IRS and FinCEN instructions discuss. Roles can overlap.
Related pages
Sources and data notes
- Organisation for Economic Co-operation and Development, Standard for Automatic Exchange of Financial Account Information in Tax Matters, Second Edition (Common Reporting Standard and Commentaries). https://www.oecd.org/content/dam/oecd/en/publications/reports/2017/03/standard-for-automatic-exchange-of-financial-account-information-in-tax-matters-second-edition_g1g73eb6/9789264267992-en.pdf. Retrieved .
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