Australia: Status of CRS legislation

CRS legislation in Australia

The common reporting standard (CRS) legislation is expected to be passed by Parliament soon. On enactment, the rules would apply from 1 July 2017 (not 1 January 2017, as originally envisaged by the earlier Exposure Draft). Accordingly, all financial institutions (including depository institutions, custodial institutions, investment entities and specified insurers) need to prepare for and understand these rules.

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In addition to the change to the expected implementation date, there have been other changes made that were not included in the original Exposure Draft, such as:

  • Financial institutions that fail to collect account holder self-certifications about the jurisdiction of residence for tax purposes (and account holders that provide false or misleading self-certifications) may be subject to administrative penalties.
  • As an anti-avoidance measure, the Australian Taxation Office (ATO) may require an account to be treated as a “reportable account” in certain circumstances. Similarly, the ATO would also have the ability to treat an entire financial institution as a reporting financial institution if it reasonably believes that the financial institution undertook a transaction or entered into an arrangement with the dominant purpose of avoiding its reporting liability.
  • Statements in respect of lower value accounts or pre-existing entity accounts may only be required to be provided to the ATO by 31 July 2019.
  • Reporting financial institutions would need to maintain records for five years (from the date of providing a statement to the ATO) that records the due diligence procedures undertaken to discharge its obligations in terms of the CRS.

 

Read a February 2016 report prepared by the KPMG member firm in Australia: CRS: moving goal posts, upward costs? 

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