CRS is now effective for more than 50 ‘early adopter’ countries, as proposed by the OECD. However, it may impose a heavier operational burden on financial institutions than the existing Foreign Account Tax Compliance Act (FATCA) and UK Crown Dependencies & Overseas Territories (CDOT) regimes.
With Michael H. Plowgian, Principal at KPMG in the US who was instrumental in developing the CRS as a Senior Advisor at the OECD prior to KPMG and Peter Grant, Operational Tax Director at KPMG in the UK to:
With Jennifer Sponzilli, Global AEOI Lead Partner at KPMG and Peter Grant, Operational Tax Director at KPMG in the UK to:
Aiming to reduce tax evasion on assets and income held abroad by investors, the CRS builds on the US Foreign Account Tax Compliance Act (FATCA) to take a significant step towards a globally coordinated approach to the automatic exchange of financial account information (AEOI).
As the next round of reporting in the UK is due by 31 May 2016 and the complexity and volume of client information to collect and report on increases, financial institutions face a much heavier operational burden. According to a recent KPMG survey among executives in financial institutions, 61% of organisations with headquarters and/or operations in the UK surveyed, believe compliance with the CRS will require more resources than compliance with FATCA. However, only 29% have actively taken substantial steps towards implementation.
Opting to undertake the reporting manually presents a significant risk and has high cost implications. KPMG developed ‘KPMG AEOI Reporting’, a global technology solution which is scalable and easy-to-use and allows organisations to comply under multiple regimes in a cost and resource-effective way.
For more information on how KPMG can help you address the reporting requirements for CRS, DAC, FATCA and CDOT, please visit our dedicated webpage.
HM Revenue & Customs (HMRC) released draft guidance in September 2015, covering the AEOI regimes. These guidance notes are designed to assist financial institutions with their implementation of CRS and DAC and highlight differences between DAC, FATCA and CDOT regimes. Please visit here to review the guidance.
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