Charities may need to consider their responsibilities under the Common Reporting Standard regime.
In a global effort to tackle cross border tax evasion, UK tax resident charities could be UK Reporting Financial Institutions under the Common Reporting Standard (CRS) and required to perform due diligence on their beneficiaries and report them to HMRC. This is a change to the previous exchange of information agreements (such as the FATCA agreement with the United States of America), where registered charities were deemed to be Non-Reporting Financial Institutions. This sounds an alarming scenario. However, it should be noted that not all charities will be Financial Institutions for the purpose of the CRS – just because a charity was a Non-Reporting Financial Institution for the agreement with the United States of America does not automatically mean it is a Reporting Financial Institution for the CRS - the definitions are slightly different.
So what is CRS and what do charities have to do? To assist, KPMG in the UK’s Operational Taxes team have prepared a note setting out further details on the challenges for charities under the Common Reporting Standard.
Should you have any questions on the note, or you wish to discuss further, please contact your usual KPMG contact or one of the named contacts.
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