The Organization for Economic Co-operation and Development (OECD) has announced that the Common Reporting Standard (CRS) for the automatic exchange of account information (AEOI) will be revised and possibly improved in an upcoming consultation.
The current system prescribes the collection of information on foreign tax resident’s accounts by financial institutions in participating countries. Such information is then reported by financial institutions to their domestic tax authorities, which will forward it to the tax authorities of the accountholder’s country of residence.
The necessity for a CRS review was brought about by the latest increase in the use of innovative financial products, like crypto-assets and virtual currencies, but it is expected to address also certain trust-related issues as reporting rules for joint accounts, for controlling persons of passive non-financial entities and for account holders where a trust is a financial institution.
The consultation will take place in 2021, and the OECD will involve tax authorities and industry experts of all participating countries in order to gather useful input on possible further improvements.