CRS/FATCA

What is CRS/FATCA Reporting?

The Common Reporting Standard (CRS) mandates that financial institutions submit annual reports to their local tax authorities, detailing information about clients who are tax residents of other participating jurisdictions. This information is then forwarded to the appropriate tax authorities of those jurisdictions. Similarly, the Foreign Account Tax Compliance Act (FATCA) requires foreign financial institutions (FFIs) to report annually to their local tax authorities certain information about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest. This information is then passed on to the U.S. Internal Revenue Service (IRS) to help combat tax evasion.

In what format is CRS/FATCA reportable?

FATCA (Foreign Account Tax Compliance Act) and CRS (Common Reporting Standard) reporting requirements mandate financial institutions to collect and report specific information about account holders to the relevant tax authorities. The format for reporting under these regulations typically includes the following key elements:

Reporting Format

  1. Identification of the Reporting Entity:
    • Name
    • Address
    • Organization number
    • Global Intermediary Identification Number (GIIN) for FATCA
  2. Account Holder Information:
    • Name
    • Address (including country code)
    • Date of birth
    • Tax identification number (TIN) or equivalent
    • Country code indicating tax residency
  3. Financial Details:
    • Account number or registration number
    • Balance or capital value at year-end
    • Income details (e.g., interest, dividends)
    • Gross proceeds from sales or other transactions

Differences in Reporting

  • FATCA focuses primarily on U.S. persons and requires financial institutions to report on accounts held by U.S. citizens or residents.
  • CRS, on the other hand, requires reporting on accounts held by tax residents of any participating jurisdiction, thereby encompassing a broader scope of tax residency.

Submission Process

Financial institutions typically submit this information annually to their local tax authority, which then exchanges the data with other jurisdictions as per international agreements.

How can Finmatek help you?

  • Simplified Data Collection & Reporting: Finmatek simplifies the process of collecting and organizing the necessary data for CRS and FATCA, making reporting efficient and reducing manual effort.
  • Regulatory Expertise & Updates: Finmatek keeps you up to date with the latest regulatory changes and reporting requirements for both CRS and FATCA, ensuring your reports are compliant with evolving global tax regulations.
  • Secure Data Transmission: Finmatek ensures that all sensitive data related to CRS/FATCA reporting is transmitted securely, safeguarding your organization’s compliance with data protection laws.
  • Comprehensive Data Validation & Review: The platform offers built-in validation checks to ensure the accuracy and completeness of your reporting data, minimizing the risk of penalties from tax authorities due to incorrect filings.