Understanding the Common Reporting Standard
Societe Generale complies with the OECD's requirements by applying the Common Reporting Standard to its entities.
At the request of the G8 and the G20, the Organisation for Economic Co-operation and Development (OECD) has developed an international standard to improve transparency and the automatic exchange of tax information: the Common Reporting Standard (CRS). The standard already applies to all the countries in the European Union (EU) and will be applied to the 99 countries who have signed the agreement.
The aim of the CRS is to allow tax administrations to have a systematic knowledge for tax purpose of financial assets held abroad by their residents.
To implement the automatic exchange of information, the standard is based on the combined action of:
- client account holders, who must report their tax residence via self-certification in order to determine whether they should be regarded as "non-residents";
- financial institutions, which must report annually to their local tax authority "non-resident" clients, their account balance and the financial income they have received in that year;
- tax authorities of participating countries, which must send the information to the tax authorities of the country corresponding to the tax residence filed by the client.
The regulation will be implemented on 1st January 2016 for countries which have committed to the preliminary annual exchanges in 2017. The information about a client's current tax residence will become part of our procedures for ensuring an in-depth knowledge of our clients.
FATCA VS CRS?
FATCA (Foreign Account Tax Compliance Act) only affects taxpayers in America and the reporting by those taxpayers to the American tax authorities. CRS affects all the clients of financial institutions established in participating countries.
Please note: the details provided on this page are intended to help understand the CRS requirements and are not intended to serve as tax advice. If you are uncertain of your CRS status or the impact of this regulation, please consult a professional tax advisor.
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FATCA (Foreign Account Tax Compliance Act), a US law whose objective is to fight against tax evasion schemes that use foreign accounts or entities held by US taxpayers, became effective as of 1 July, 2014.