OECD launches common reporting standard
The Organization for Economic Co-operation and Development (OECD) has launched the Automatic Exchange of Information (AEOI) also known as the common reporting standard (CRS) – a globally co-ordinated approach to disclosure of account information between tax authorities.
It follows on from several country’s successful implementation of the US Fatca regulations to counter US tax evasion, said a statement.
KPMG in Bahrain recently held a seminar session to help chief financial officers and chief compliance officers from financial institutions to understand the implications of CRS and what they need to do to comply, it said.
Craig Richardson, partner and head of Tax at KPMG in Bahrain, said: “While CRS is similar to FATCA, it requires a much broader information standard and therefore, businesses will need more help to meet the new standards.
“The seminar, attended by over 30 senior officials from reputable organizations, was a great success. It was great to be able to help some of Bahrain’s key financial organisations gain a deeper understanding of CRS at the seminar.”
The new standards are based on annual sharing of information between financial institutions from one jurisdiction with other jurisdictions through specific exchange of information agreements.
Currently, as many as 61 countries have agreed to implement CRS from January 1, with more than 30 more expected to join in subsequent years (Kuwait, Qatar, United Arab Emirates and Saudi Arabia have committed to implement CRS starting in January 2017).
Christopher S Brown, a tax director, KPMG London was a speaker at the seminar and shed light on which entities are considered financial institutions under CRS, the differences between CRS and Fatca and how and when CRS will affect the financial institutions in Bahrain, especially holding companies that have entities in early adopter countries.
“Preparation is key for early adopter countries to meet their CRS implementation requirements cost-effectively and with as little disruption as possible. In order to achieve this, it is critical that financial institutions are on board and fully understand their role as soon as their host countries begin implementation,” he added.