The OECD’s effort to ensure consistent implementation of the common reporting standard (CRS) continues with the publication, on 6 April, of a new edition of its guidance on automatic exchange of information for tax purposes, including updated information on the CRS XML schema, and new frequently-asked-questions on the CRS.
The CRS is part of a scheme designed to combat tax evasion and avoidance whereby countries are asked to obtain information from their financial institutions and automatically exchange that information with other countries on an annual basis. The plan responds to a G20 request and was approved by the OECD Council on 15 July 2014.
CRS XML schema
The OECD’s second edition of the Standard for Automatic Exchange of Financial Account Information in Tax Matters expands the CRS XML schema user guide, sets out additional technical guidance on the handling of corrections and cancellations within the CRS XML schema, and revises and expands a set of correction examples. The other parts remain unchanged.
The aim is to provide a technical solution to support the common standard on reporting, due diligence, and exchange of financial account information so that it will be possible automatically exchange financial account information with respect to all reportable accounts identified by financial institutions on the basis of common reporting and due diligence rules.
In particular, the user guide contains the information required to be included in each CRS data element to be reported in the CRS XML schema. The guide is divided into four sections based on the schema and it explains the information that should be given.
The report states that the CRS XML schema is designed to be used for the automatic exchange of financial account information between competent authorities. In addition, the CRS could also be used for domestic reporting by financial institutions to domestic tax authorities under the CRS.
The OECD has also updated the list of frequently-asked-questions on the application of the CRS, adding answers to questions received from business and government delegates to clarify the CRS and assist in ensuring consistency in its implementation.
In particular the OECD provides a set of definitions regarding institutions, gives more detailed explanations on financial account and on reportable account and provides clarifications on how to undertake due diligence