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bronze

Active Member
I've had a couple of banks in my country ban me and close all my accounts

I assume as police or tax authority conducted a warrant for my account details

They would then know everyone I sent money to and from

Therefore if I had a emi that had sent to my account then thats how they find
 

Perry8

Active Member
Same answer most of all these EMI's and financial service companies give. Not sure how reliable it is.
It is reliable. EMIs are currently not reporting under CRS (or FATCA unless they have signed up individually). In the EU framework there is an exemption for EMIs.

EU does, of course, know that this is "a hole in the fence". But, the amount of money that passes throug EMIs every year is still negectable in big picture.

Question is, how does the TAX department know that you have a Payoneer account?!
The answer is that they don't - unless you tell them.

I've had a couple of banks in my country ban me and close all my accounts

I assume as police or tax authority conducted a warrant for my account details

They would then know everyone I sent money to and from

Therefore if I had a emi that had sent to my account then thats how they find
If there is a criminal investigation both banks and EMIs will hand out any information they have on you. But, they have to be contacted individually. Depending on the country, yhis might also be true if it is the tax authorities doing an investigation. So, if you have sent money from or to an EMI in your name to and account in your name they will find the EMI if they look at your bank statement.
 

Perry8

Active Member
ok, but ,generally spoken, most EMI’s DONT report accounts ,correct ?
They do not report because they are excempt from reporting. This might change in the future.

But, and this is important, you have to check witch license they operate under. Revolut has a banking license as well, so if they use this license they will have to report.
 

ikan

Active Member
Some EMi's of Western EU working in pair with real banks are under pressure. Banks comply CRS => so must do their EMI"s partner. If the EMI is reluctant => relationship is not staring any more.
This is my point of vue.

Anyhow, was here threads with spontaneous testimonials of guys who got reported by EMI's and then got audited by tax man.

-------
Neverless, in that digital environment, it is easy to believe that some tax offices and polices had set up automatic over all enquiry too all well known EMI's, depending your particular profile and fields of business/incomes....You all see what I mean.
 

CounselRep

New member
They do not report because they are excempt from reporting. This might change in the future.

But, and this is important, you have to check witch license they operate under. Revolut has a banking license as well, so if they use this license they will have to report.

I have often seen the claim here on Offshore Corp Talk that EMIs do not report under CRS.

And I've seen copies of emails from EMIs pasted into threads here telling their customers that they don't report and CRS.

Transferwise even says on its website that it is "evaluating it's obligations under CRS and FATCA" but for the time being it doesn't report (and I suspect other EMIs are probably just following Transferwise's lead on this).

So while it seems EMIs don't report, I haven't seen an EMI say they are not obliged to report - two very different things.

So I spent some time yesterday trying to find this "EMI exemption" in the CRS standard and supporting documents, in the EU CRS directive and in the UK CRS legislation and while I'm definitely no CRS expert by a long shot, I couldn't find a mention of "Electronic Money Institution" or even "electronic money", let alone a specific exemption for them.

So does anyone know where this exemption is found?

Is a CRS reporting exemption for EMIs explicit in any of the CRS laws? Or is it because EMIs (and the normal banks they use to keep their customers' money like Barclays, JP Morgan Chase and Wells Fargo) do not fall within the relevant CRS definitions?

It would be great if anyone could point us to the specific exemption in the CRS law, or properly explain how CRS laws do not apply to EMIs, e.g. are EMIs and the banks they are not "Reportable Financial Institutions" because they do not provide "Depository Accounts" or "Custodial Account"s?

Or maybe they are Reportable Financial Institutions but EMI accounts are not "Reportable Accounts" because they are not "Depository Accounts" or "Custodial Accounts"? (or they are, but those accounts then fall within the definition of "Excluded Accounts"?).

And does anyone have specific example of someone having their EMI account reported under CRS and AEOI?

I'm pretty confident that in practice the EMIs are not reporting people under CRS, otherwise they would have seen a big effect on customer behaviour and/or numbers, but it would be nice to have a definitive explanation for why EMIs are not obliged to report to do so.
 

CounselRep

New member
Nevermind - I found it, for UK registered EMIs at least (but I strongly suspect it will be the same interpretations for EMIs registered in other EU jurisdictions).

The answer can be found in the UK's tax authority's (HMRC) "Internal Manual on International Exchange of Information" [my emphasis in bold]:

--------QUOTE-----------

"Electronic Money Institutions authorised under the Electronic Money Regulations 2011 (EMR), which implements the European Union Electronic Money Directive (2009/110/EC) (EMD) in the UK, are not deposit takers for the purposes of the EU Capital Requirements Directive (2013/36/EU) (CRD). Issuing electronic money (e-money) in exchange for funds, i.e. providing an e-money account in which to hold funds, does not constitute deposit taking. Consequently, Electronic Money Institutions will not fall within the definition of Depository Institution, which requires deposits to be accepted in the ordinary course of a banking or similar business.

Similarly, Payment Institutions authorised under the Payment Services Regulations 2009 (PSR), which implements the European Union Payment Services Directive (2007/64/EC) (PSD) in the UK, are not deposit takers for the purposes of the CRD. Any funds received by Payment Institutions from payment service users with a view to the provision of payment services does not constitute deposit taking. Consequently, Payment Institutions will not fall within the definition of Depository Institution, which requires deposits to be accepted in the ordinary course of a banking or similar business."

------------END QUOTE-----------

Phew. Further information can be found here:

IEIM400750 - International Exchange of Information Manual - HMRC internal manual - GOV.UK
 
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I have often seen the claim here on Offshore Corp Talk that EMIs do not report under CRS.

And I've seen copies of emails from EMIs pasted into threads here telling their customers that they don't report and CRS.

Transferwise even says on its website that it is "evaluating it's obligations under CRS and FATCA" but for the time being it doesn't report (and I suspect other EMIs are probably just following Transferwise's lead on this).

So while it seems EMIs don't report, I haven't seen an EMI say they are not obliged to report - two very different things.

So I spent some time yesterday trying to find this "EMI exemption" in the CRS standard and supporting documents, in the EU CRS directive and in the UK CRS legislation and while I'm definitely no CRS expert by a long shot, I couldn't find a mention of "Electronic Money Institution" or even "electronic money", let alone a specific exemption for them.

So does anyone know where this exemption is found?

Is a CRS reporting exemption for EMIs explicit in any of the CRS laws? Or is it because EMIs (and the normal banks they use to keep their customers' money like Barclays, JP Morgan Chase and Wells Fargo) do not fall within the relevant CRS definitions?

It would be great if anyone could point us to the specific exemption in the CRS law, or properly explain how CRS laws do not apply to EMIs, e.g. are EMIs and the banks they are not "Reportable Financial Institutions" because they do not provide "Depository Accounts" or "Custodial Account"s?

Or maybe they are Reportable Financial Institutions but EMI accounts are not "Reportable Accounts" because they are not "Depository Accounts" or "Custodial Accounts"? (or they are, but those accounts then fall within the definition of "Excluded Accounts"?).

And does anyone have a specific examples of someone having their EMI account reported under CRS and AEOI?

I'm pretty confident that in practice the EMIs are not reporting people under CRS, otherwise they would have seen a big effect on customer behavior and/or numbers, but it would be nice to have a definitive explanation for why EMIs are not obliged to report to do so.


I am 90% sure they don't report, but this is my personal opinion only.

I have 7 EMIs and 2 bank current accounts all on my name registered my previous home address. My credit report updated to yesterday only shows the 2 bank current accounts and none of the EMIs. I don't have any credit cards and never took a loan. I suppose the banks are reporting while the EMIs are not, but maybe this is hidden, so I don't fully know, this is my personal opinion.
 

Perry8

Active Member
Nevermind - I found it, for UK registered EMIs at least (but I strongly suspect it will be the same interpretations for EMIs registered in other EU jurisdictions).
Yes. The point is that they are not deposit takers.

I think UK was the first country who clarified this, although for EMIs it was very clear from the beginning. Here is one PWC paper from 2017 regarding Malta which states exactly the same. https://www.pwc.com/mt/en/publications/tax-legal/assets/crs_fatca_march_2017.pdf

Please note two things:
1) This also applies to FATCA - EMIs are not reporting under FATCA either.
2) The uncertenty was the PIs (Payment institutions). Because they where not mentioned in the framework. This, and some other issues, prompted the EMA (Electronic Money Association) to send a letter to all EU government. It is very clarifying to read. This one is the one to Luxembourg: https://www.e-ma.org/emaweb/wp-cont...g-Tax-Authorities-regarding-FATCA-and-CRS.pdf But there were similar letters to all EU countries.
 

CounselRep

New member
Here is one PWC paper from 2017 regarding Malta which states exactly the same. https://www.pwc.com/mt/en/publications/tax-legal/assets/crs_fatca_march_2017.pdf

The wording for Matla seems quite close to the UK's wording for Depository Institutions, alhough strangely also quotes the Maltese guidelines as saying:

"an EMI which is authorized to issue e-money and transfer this to third parties, could fall to be defined as a Custodial Institution."

This is different to the UK position, and could be a bit of a worry if you are a customer of a Maltese registered EMI...

1) This also applies to FATCA - EMIs are not reporting under FATCA either.

I wasn't aware until recently reading on this forum that individual institutions like banks can (be forced to) sign up to FATCA - not just countries. People must be glad that the US hasn't come after the EMIs' USD$ accounts (yet)...

This, and some other issues, prompted the EMA (Electronic Money Association) to send a letter to all EU government. It is very clarifying to read. This one is the one to Luxembourg: https://www.e-ma.org/emaweb/wp-cont...g-Tax-Authorities-regarding-FATCA-and-CRS.pdf But there were similar letters to all EU countries.

As an industry association I suspect the EMA doesn't have regulatory or enforcement power, but their reasoning in relation to EMIs not being depository institutions and not providing depository accounts makes sense and seems to have been adopted by key regulators which gives some legitimacy on that front.

Thanks for sharing those links.
 

juvejuve2020

New member
Super interesting.

I am following your opinions, as I have some EMI's (Rev., Bunq, Monese, N26), and in all of them I have some money, and this issue of CRS really worries me.

I know they only send the deposited amount at the end of each year (in these EMI, I take the money and keep it at home), but if they don't report it, even better!
 

CounselRep

New member
Super interesting.

I am following your opinions, as I have some EMI's (Rev., Bunq, Monese, N26), and in all of them I have some money, and this issue of CRS really worries me.

I know they only send the deposited amount at the end of each year (in these EMI, I take the money and keep it at home), but if they don't report it, even better!

I haven't confirmed for definite myself, but from what I have read on this forum, N26 and Bunq might have banking licences and therefore might report under CRS? Not sure about Revolut or Monese.

If CRS is a concern for you, then it might be worth you looking into those financial institutions a little more so you know for sure what their status is there.

I think I have also read some scepticism on the forum about CRS and the "end of year balance" reporting too. You may only have $0 at that point, but if you are still reported to your local tax authority for interest earned during the year (or for your indicia or for some other reason) what's to stop your local tax authority investigating you further? Maybe some others on the forum who know more about this process can elaborate further on this point?
 

ikan

Active Member
I think I have also read some scepticism on the forum about CRS and the "end of year balance" reporting too.

As per original statuts of AEOI //// CRS is normaly due ln october. But some banks report CRS "end of year".

Sadly we don't know when each bank or Emi's do it
 

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