Are you ready to face the era of financial information exchange between jurisdictions?
The Common Reporting Standard (CRS) is currently the burning topic amongst those in the financial services industry and international business.
The implementation of CRS is a key vehicle of the Automatic Information Exchange of Information (AEOI) which is aimed at preventing tax evasion via the global automatic exchange of information between participating jurisdictions.
More than 100 jurisdictions have committed to exchange the CRS information. Malaysia has committed to exchange the CRS information from 2018 and would also be receiving financial account information on Malaysian residents from other countries’ tax authorities. This will help ensure that residents with financial accounts in other countries are complying with their domestic tax laws and act as a deterrent to tax evasion.
List of participating jurisdictions for Automatic Exchange of Information. This list will be updated from time to time where necessary.
QUICK FACTS ABOUT CRSAgreement :Could be bilateral or multilateral agreement among the participating jurisdictionsReporting Deadlines:Based on agreed Competent Authority Agreement. The Model Competent Authority Agreement (Bilateral, Multilateral, Non-reciprocal) signatories first reporting will be either 2017 or 2018.Reportable accounts:An individual or an entity that is resident in a Reportable Jurisdiction under the tax laws of such jurisdictions and Passive NFE with Controlling Person that is a Reportable Person. Therefore, an individual or an entity may be reported to several jurisdictions if he/ she/it is a taxpayer in multiple reportable jurisdictions.Data to be reported:The information to be reported includes the name, address, taxpayer identification number (TIN), account number, account balance or value, gross amounts paid to the account in the year, date and place of birth, and total gross proceeds paid or credited to the account. For an entity account with one or more controlling persons that are a reportable person, the institution must report the name, address, country(s) of residence and TIN of the entity and the name, address, country(s) of residence, TIN and date and place of birth of each reportable person.AgreementReporting DeadlinesReportable accountsData to be reported
With globalisation, it is normal and even expected that companies operate in multiple jurisdictions. However, tax residency will not be automatically applied even if a company is registered in a particular jurisdiction.
The creation of substance becomes increasingly important. There has to be substance to operate, towards creating and evidencing economic substance.
Consult us today to understand more on how to create substance through Labuan.