Is it easy/possible to dodge the CRS?

enceladus

Banned User
BANNED MEMBER
Entrepreneur
Hypothetically, I am wondering how feasible would it be to dodge the CRS, i.e. the automatic exchange of information mandated by OECD countries where your financial data is sent by the country where you hold a bank account to your country of residence for tax purposes.

Suppose Bob is a citizen of a high tax country A where he currently lives, but also holds a permanent residence permit (or a passport) of low tax country B. If Bob goes to country C and opens an account there using his address in B, how would A ever be informed about his account?
 

Old Spice

Active Member
The only way I suspect is to have an address in a country that doesn't really care about the CRS for tax purposes.
Country B would not be the country address he would use unless this country doesn't tax you on foreign capital or foreign earnings.
Panama comes to mind since you could report this address to the bank with all the details required. I.e. Your tax residency and where you file your tax returns.
 

enceladus

Banned User
BANNED MEMBER
Entrepreneur
Yes of course country B has to be chosen carefully, the question was more related as to what kind of verification, if any, could the bank in C do supposing you provided a document (e.g. your national ID) from B. In an extreme case, you could even rent a cheap place at B and have it as your "base" for an enhanced proof of address.

I read that Luciano Pavarotti was condemned for tax evasion because he declared to live in Monaco, but the Italian authorities made the case that his apartment there couldn't fit his family. But he was Pavarotti, had lots of wealth and the investigation was initiated by Italian authorities, not by the bank itself.
 

Martin Everson

Offshore Consultant
Business Angel
I read that Luciano Pavarotti was condemned for tax evasion because he declared to live in Monaco, but the Italian authorities made the case that his apartment there couldn't fit his family.
I'm more surprised he could fit his ass into Monaco period.

the question was more related as to what kind of verification, if any, could the bank in C do supposing you provided a document (e.g. your national ID) from B.
Bank will request Self Certification of your tax residency if bank is located in a CRS country. So you would typically need ID, proof of address and a Tax-ID even for a non-CRS country. However, CRS data will not be shared with the non-CRS country ;).
 

enceladus

Banned User
BANNED MEMBER
Entrepreneur
I'm more surprised he could fit his ass into Monaco period.



Bank will request Self Certification of your tax residency if bank is located in a CRS country. So you would typically need ID, proof of address and a Tax-ID even for a non-CRS country. However, CRS data will not be shared with the non-CRS country ;).
So in a nutshell the theoretical scheme works as the self-certification is fairly easy to achieve
 

GrumpyMess

Building Trust
Entrepreneur
The only reliable solution is to have a residency in a country B and the bank in the same country, since CRS is not applicable to residents. If the bank is in the country C it can determine the residence indirectly or send CRS to all possible countries, not only the country you've indicated.
 

enceladus

Banned User
BANNED MEMBER
Entrepreneur
The only reliable solution is to have a residency in a country B and the bank in the same country, since CRS is not applicable to residents. If the bank is in the country C it can determine the residence indirectly or send CRS to all possible countries, not only the country you've indicated.
Does the bank have the right, or even the obligation under CRS terms to send the information to the country they "guess" the client is living in? Is that legal?
 

GrumpyMess

Building Trust
Entrepreneur
Does the bank have the right, or even the obligation under CRS terms to send the information to the country they "guess" the client is living in? Is that legal?
According to the OECD CRS rules the bank has such right, but no obligation yet. Much depends on the bank and jurisdiction.
 

Martin Everson

Offshore Consultant
Business Angel
Does the bank have the right, or even the obligation under CRS terms to send the information to the country they "guess" the client is living in? Is that legal?
They have to under CRS. It is called indica. Any indication a client may be from a reportable CRS country then they must report to all countries where indicia exists.

 

enceladus

Banned User
BANNED MEMBER
Entrepreneur
They have to under CRS. It is called indica. Any indication a client may be from a reportable CRS country then they must report to all countries where indicia exists.

Supposing they do, would they have to inform you beforehand or afterwards?
 

enceladus

Banned User
BANNED MEMBER
Entrepreneur
They do not inform you. CRS exchange has been added to most banks terms and conditions so you accepted already.
Interesting, I had an account at an EU country and when I asked my manager when/if they would notify me when they'd start reporting back to my home country, they said yes and that they were required to do so.
 

Martin Everson

Offshore Consultant
Business Angel
Interesting, I had an account at an EU country and when I asked my manager when/if they would notify me when they'd start reporting back to my home country, they said yes and that they were required to do so.
It's called Terms & Conditions update which goes into effect automatically.
 

GrumpyMess

Building Trust
Entrepreneur
Interesting, I had an account at an EU country and when I asked my manager when/if they would notify me when they'd start reporting back to my home country, they said yes and that they were required to do so.
It's definitely a good bank. Which country?
 

Crest

New Member
Safest option would be as you said to show some form of actual residence, ie: lease agreement, utility bill, driving license etc from country B. Country C might as you to prove the that you are a resident of said country, even though the form is self certification.
 

mnschwarz

Offshore Agent
Business Angel
There's generally three ways to avoid it:
1. Live in a non CRS country (I didn't find one I'd be happy in personally).
2, Bank in a non CRS country (I also didn't find any decent banks in those countries).
3. Use an account signatory from a non CRS country so you are never named (I'm not that trusting).

Or, as a sort of work around, live in a territorial taxed jurisdiction. Panama as mentioned above for example, is part of the CRS and will report. That being said, if that's your residence, Panama isn't going to care about the info they receive as they have a territorial tax system so is a good option.

Also keep in mind that residency for tax purposes, permanent residence and citizenship are all very different things. In my experience with numerous banks, they've asked me for proof of address and ID. Not citizenship, not permanent residency.

And secondly, the banks have to report where you are a resident for tax purposes however they may indeed choose to over report also. Such as previously listed residencies, your country of ID (passport for example), mailing address etc.
 

BTCNG

Building Trust
Entrepreneur
Another way is if you have an active NFE (but you need to convice your bank first...).
The bank needs to check your assets and income (if both are generated from active business and ment for active business).
 

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