Implementing agreements under the global standard on automatic exchange of information
HMRC are seeking views on the implementation of agreements to be entered into between the UK and various overseas jurisdictions to adopt the Common Reporting Standard on financial account information.
The UK has been a leader in the development of automatic exchange of information to help combat tax evasion. In September 2012 the UK signed an agreement with the United States of America (US) to implement the reporting required under US FATCA (Foreign Account Tax Compliance Act) legislation, which requires automatic exchange of financial account information on US citizens and entities. In 2013 the UK signed similar agreements with its Crown Dependencies and Overseas Territories.
Following on from this, in April 2013 the UK along with France, Germany, Italy and Spain (the G5) set up a pilot to explore the possibility of developing a common approach to automatic exchange of financial account information. This was adopted by the G20 leading to work being commissioned with the Organisation for Economic Co-operation and Development (OECD) to develop a new global standard and in February 2014 the OECD delivered the Model Competent Authority Agreements for a Common Reporting Standard (CRS) which was approved by the G20 as the Global Standard for Automatic Exchange of Financial Account Information. The CRS is designed to provide maximum consistency with US FATCA in order to minimise the additional costs and burdens to business from the increased reporting requirements.
Domestic legislation will be required to implement the CRS. Under the proposed regulations that are the subject of this discussion document, financial institutions will be required to capture information in relation to accounts in existence as at 31 December 2015, and new accounts opened on or after 1 January 2016 with first reporting in 2017.