The following statements are being issued today by KPMG International concerning the signing of the Multilateral Competent Authority Agreement on implementation of the automatic exchange of information standard at the 7th meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes in Berlin, Germany:
"Today’s groundbreaking agreement by the signatory jurisdictions to automatically exchange tax information under the Organisation for Economic Co-operation and Development’s (OECD’s) Common Reporting Standard, or CRS, is yet another step towards global transparency in tax affairs,” said Greg Wiebe, Global Head of Tax, KPMG International.
“Implementation of the multilateral competent authority agreement will impose complex new due diligence and automatic reporting requirements on financial institutions doing business in the signatory jurisdictions, ” Wiebe added. “In response, beginning in 2016, these institutions will need to implement new customer on-boarding processes, gather new information and documentation on existing account holders, and put in place systems to report required information to the proper government entities. Equally important, non-financial multinationals will also need to determine their status under the CRS and how they are affected.”
Jennifer Sponzilli, a principal with KPMG’s U.S. international tax team in the U.K., said: “The Common Reporting Standard and attendant commentary provides guidance to financial institutions in the signing jurisdictions about the scope of the due diligence and reporting obligations that will apply in those jurisdictions.”
“Now that the Multilateral Competent Authority Agreement has been signed, there will be a race against the clock for both governments and financial institutions to meet the ambitious timelines,” Sponzilli added. “For governments, they will likely need to enact legislation or regulations to effectuate the Multilateral Competent Authority Agreement in their jurisdictions. For financial institutions, they will be working hard to get customer due-diligence procedures in place by January 1, 2016 – less than 15 months from now – and then will turn to meet the deadline for the first reporting of information about nonresident account holders required in 2017.”
The Standard for Automatic Exchange of Financial Account Information in Tax Matters calls on governments to obtain detailed account information from their financial institutions and exchange that information automatically with other jurisdictions on an annual basis. The Standard was developed at the OECD under a mandate from the G20, endorsed by the G20 Finance Ministers in February 2014, and approved by the OECD Council.
The Global Forum on Transparency and Exchange of Information for Tax Purposes is the world’s largest network for International cooperation in the field of taxation and financial information exchange, bringing together 122 countries and jurisdictions plus the European Union. The meeting in Berlin, Germany was expected to see attendance from more than 200 delegates from more than 95 member jurisdictions and 12 international organizations.
KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 155 countries and have 174,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.