How does the Common Reporting Standard (CRS) work?

[John89]

Greetings. I have a simple question about the Common Reporting Standard (CRS). Do governments ask each bank individually for information about a person? Or is there a nation-wide dataset of all the banks' clients, and foreign governments can consult this list?

I am not planning to open a bank account in the US, but I know that in the US there are over 5,000 banks, so a government could hardly ask all banks if someone has some money there, right? I am not asking about the US specifically because I don't plan to open a bank account in the US, I just want to understand how the system works.

If there is no nation-wide dataset, and one is planning to hide some money, it would be safer to open an account in a small bank in some far-away town, wouldn't it?

 

[bronze]

I believe at end of financial year each bank would send account details including balance to each country of their client

Its more as to whether the country receiving process it I reckon

 

[John89]

But what if the country where one has the bank account doesn't know that their customer lives in another country? E.g. if I live in country x, and move to country y, and don't tell my bank in county x that I moved, how can the government of country y find out I have a bank account in country x?

 

[JackAlabama]

But what if the country where one has the bank account doesn't know that their customer lives in another country? E.g. if I live in country x, and move to country y, and don't tell my bank in county x that I moved, how can the government of country y find out I have a bank account in country x?

banks report to your stated residence country.
But if they have indica they can report to whatever country they think you are resident. This could potentially go so far as tracking ip and withdrawals from atm if they are aggressive. But I doubt few are competent like that to figure it out.

simple fix:
Get residency in a place you want the reports going to and be there.

@Martin Everson might be the one with most knowledge on this matter.

 

[Martin Everson]

JackAlabama explained it well. Indica is key to hiding. If you leave no trace with the bank of of being in another country then you may ok but not worth risk.

 

[gmbh]

JackAlabama explained it well. Indica is key to hiding. If you leave no trace with the bank of of being in another country then you may ok but not worth risk.

What do you mean with Indica?

 

[Martin Everson]

http://www.aldic.net/crs-indicia-search-to-determine-the-residence/
------- quote start

A Reporting Financial Institution may not rely on a self-certification or Documentary Evidence if the Reporting Financial Institution knows or has reason to know that the self-certification or Documentary Evidence is incorrect or unreliable (Section VII (A) of the CRS). It should proceed to permanent residence address test based on documentary evidence or the FI would need to determine the residence on the basis of an indicia search. A self-certification (and/or documentary evidence) would be needed in case of conflicting indicia, in the absence of which reporting would be done to all reportable jurisdictions for which indicia have been found.

If the Reporting Financial Institution does not rely on a current residence address for the individual Account Holder based on Documentary Evidence as set forth in subparagraph B(1), the Reporting Financial Institution must review electronically searchable data maintained by the Reporting Financial Institution for any of the following indicia and apply subparagraphs B(3) through (6):

1. identification of the Account Holder as a resident of a Reportable Jurisdiction;
2. current mailing or residence address (including a post office box) in a Reportable Jurisdiction;
3. one or more telephone numbers in a Reportable Jurisdiction and no telephone number in the jurisdiction of the Reporting Financial Institution;
4. standing instructions (other than with respect to a Depository Account) to transfer funds to an account maintained in a Reportable Jurisdiction;
5. currently effective power of attorney or signatory authority granted to a person with an address in a Reportable Jurisdiction; or
6. a “hold mail” instruction or “in-care-of” address in a Reportable Jurisdiction if the Reporting Financial Institution does not have any other address on file for the Account Holder.

If any of the indicia listed in subparagraph B(2)(a) through (e) are discovered in the electronic search, or if there is a change in circumstances that results in one or more indicia being associated with the account, then the Reporting Financial Institution must treat the Account Holder as a resident for tax purposes of each Reportable Jurisdiction for which an indicium is identified, unless it elects to apply subparagraph B(6) and one of the exceptions in such subparagraph applies with respect to that account. → FI will seek to obtain from the Account Holder a self-certification or Documentary Evidence to establish the residence(s) for tax purposes of such Account Holder. If the Reporting Financial Institution cannot obtain such self-certification or Documentary Evidence, it must report the account as an undocumented account.


----- quote end

 

[jbas293rr]

Apologies for bumping an old thread, but "CRS" is too short a word to search the forum.

If your balance is kept at zero in-between purchases, a CRS report for a debit card would simply state that you have an account with a balance of zero, correct?

 

[Martin Everson]

If your balance is kept at zero in-between purchases, a CRS report for a debit card would simply state that you have an account with a balance of zero, correct?

Not correct. They will report also the total amount credited to it in addition to balance.

There is one exclusion if you read end of my post below:

https://www.offshorecorptalk.com/threads/credit-cards-and-crs.25796/post-96198

 

[Gaudillo]

Not correct. They will report also the total amount credited to it in addition to balance.

There is one exclusion if you read end of my post below:

https://www.offshorecorptalk.com/threads/credit-cards-and-crs.25796/post-96198

Regarding the CRS reporting and where information goes. If I have a Seychelles or Belize registered IBC with a bank account in Switzerland, will the swiss bank report to Seychelles/ Belize only or will they report to my country of residence as well since I am the director / beneficial owner of the IBC?

 

[Martin Everson]

Regarding the CRS reporting and where information goes. If I have a Seychelles or Belize registered IBC with a bank account in Switzerland, will the swiss bank report to Seychelles/ Belize only or will they report to my country of residence as well since I am the director / beneficial owner of the IBC?

The Swiss bank will report to all relevant countries of controlling persons and beneficial owners via their local tax authority.

 

[elboligrafo]

The Swiss bank will report to all relevant countries of controlling persons and beneficial owners via their local tax authority.

Is it safe to say that, as long as the controlling shares of an individual director is less than a certain percentage(different countries have different definitions for "controlling person" I assume), the director of that company wouldn't be reported to the relevant countries?

 

[myhand]

Actually it depends on the country of resident for the director. For instant in Germany, Denmark, Sweden and Norway I have first hand information about people got reported with a share percentage of only 20% of a company.

 

[elboligrafo]

Actually it depends on the country of resident for the director. For instant in Germany, Denmark, Sweden and Norway I have first hand information about people got reported with a share percentage of only 20% of a company.

The reporting country reviews the laws of the country of residence of the director? Or does report get shared by default, and the country of residence of the director decides if the received report ensues taxation?

 

[Martin Everson]

Is it safe to say that, as long as the controlling shares of an individual director is less than a certain percentage(different countries have different definitions for "controlling person" I assume), the director of that company wouldn't be reported to the relevant countries?

No.