The Standard for Automatic Exchange of Financial Account Information (Common Reporting Standard) was issued by the OECD (Organisation for Economic Co-operation and Development) and looks towards a globally coordinated approach for disclosure of income earned by individuals and organizations.
As a measure to counter tax evasion, it builds upon other information sharing legislation, such as FATCA (the US Foreign Account Tax Compliance Act) and the European Union (EU) Directive on Administrative Cooperation.
On 22 February 2014, all G20 (Group of Twenty Leaders and Finance Ministers and Central Bank Governors) and OECD countries endorsed the CRS. To date, more than 100 jurisdictions have committed to implement the Standard, agreeing to launch the first automatic information exchanges in 2017 or 2018.
The CRS contains the due diligence rules for FIs (Financial Institutions) to follow for collection and reporting. Failure to comply involves financial
penalties under local legislation.
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