Common Reporting Standard FAQs
Note: The information below is provided only as an overview for information purposes; it is not intended to serve as legal or tax advice. If you require such advice, you should consult a professional advisor.
In an effort to combat cross-border tax evasion, the Organization for Economic Cooperation and Development (OECD) created the Common Reporting Standard (CRS) for over 100 participating jurisdictions to implement through local laws during 2016 or 2017. Financial institutions (FIs) have new obligations that will facilitate the automatic exchange of tax information between countries. At a high level, the CRS calls on FIs to perform the following activities:
- Identify clients whose “reportable accounts” and/or transactions fall under the purview of the regime and obtain additional KYC information, e.g., foreign Tax Information Number (TIN);
- Annually report specified information regarding those clients and their accounts and/or transactions. This information will be reported to the local tax authority, which will forward to the national tax authority identified as having a legitimate interest in these clients, accounts, and transactions.
For a given account to be subject to reporting, both the account and the account holder must be reportable. Types of accounts that are in-scope for reporting include deposit, investment, custodial accounts and other financial accounts that have cash value and/or make income payments to account holders.
We expect the vast majority of our clients will not be reportable. We will be asking all new customers (and existing customers when opening additional in-scope accounts) to complete “self-certifications” attesting to their tax residencies. If a pre-existing personal or business customer (i.e., existing prior to CRS implementation) has foreign indicators, or is a business whose assets are largely financial investments, we will request the customer to complete a “self-certification”. Reportable customers will be those that self- certify as having foreign tax residencies; it will also include customers that do not complete self- certifications 90 days after being asked.
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We will begin asking all new personal clients (individuals) to self-certify as to their tax residencies, i.e., where they are required to file tax returns. If the information we have on file for you indicates that reporting may be required for your accounts, we will also ask you to complete a self-certification. We will then review the information you provide to determine whether or not your accounts are reportable.
We will begin asking all business clients (non-personal) to self-certify as to their tax residencies, and the tax jurisdictions of their controlling persons for certain investment and trust entities. If the entity information you provided before CRS implementation indicates that reporting may be required for the entity accounts, we will also ask you to complete a self-certification. We will then review the information you provide to determine whether or not the entity’s accounts are reportable.
If you are asked to provide a self-certification, you will also be considered reportable after 90 days if we have not yet received your self-certification.
Self-certifications will be required from all new & existing customers opening in-scope accounts, pre- existing customers who have foreign indicators and business customers of certain investment and trust entity types, as well as when customers introduce new foreign indicators such as a foreign address. Customers will attest to their tax residencies by completing the form.
- On the self-certification form for an individual, the customer will complete their:
- name and residence address
- jurisdiction(s) of residence for tax purposes
- Tax Information Number (TIN) issued by each jurisdiction of tax residence; and
- Date of birth.
- On the self-certification for an entity (non-personal), the customer will complete the entity’s:
- name and address
- jurisdiction(s) of residence for tax purposes for the entity
- TIN issued by each jurisdiction of tax residence
- Name(s) of controlling person(s) for certain investment and trust entity types, and
- TIN issued by each jurisdiction of tax residence for controlling persons for certain investment and trust entity types
The information we will report to the local tax authority includes the following:
- Name and address
- Tax Information Number (TIN)
- Account Balance
- Payments the reportable account earned over the year including dividends, interest, gross proceeds and other income
While we can provide general information regarding CRS (such as that contained in this FAQ), we are not permitted to provide tax advice. You are encouraged to go to www.oecd.org for further information and/or speak with a professional tax advisor.
CRS takes effect once the local country passes legislation and issues supporting regulations. In some countries, CRS became effective January 1, 2016 (known as “Early Adopter” countries), in others, CRS will become effective January 1, 2017 (known as “Late Adopter” countries), and finally in Canada and Australia on July 1, 2017. The list of these countries may be found at www.oecd.org
FIs within countries that are participating in CRS are required to comply once local legislation is passed. Scotiabank operates in more than 55 countries. In all countries where CRS has been integrated into local banking and tax regulations, Scotiabank intends to meet all resulting legal obligations.
While the requirement to self-certify tax residencies is new, Scotiabank has complied for many years with the various longstanding tax treaties in its countries of operation, that impose customer tax reporting obligations on the Bank. CRS builds on these existing customer tax reporting obligations.
Scotiabank will be required to comply with CRS customer tax reporting requirements in countries that participate in CRS. That being said, Scotiabank has a policy of strict adherence to privacy legislation and protection of client data.
What happens if I refuse to answer CRS related questions and/or complete the Self Certification form?
Much like other information about yourself that you are required to provide today (e.g., full name, identification, address, occupation, date of birth and place of business formation), CRS introduces the new obligation of also providing your tax residency information and associated TIN. Should we not be successful in obtaining this information from you for any reason, you may then be deemed reportable to the local tax authorities.
CRS includes deposit, investment (e.g., GICs), custodial (e.g., brokerage) accounts, as well as other financial accounts that have cash value (e.g., certain insurance contracts) or provide the customer with income payments.
We assess each account holder individually. If an account holder is found to be reportable, then the account holder is reported as if he/she held the entire account in single name.
I already have documentation on file with Scotiabank, related to US FATCA requirements. Is that documentation sufficient for CRS?
Documentation provided for US FATCA may not be sufficient for the purpose of CRS. When CRS related documentation is required, we will advise you of the requirements.
You may be contacted by more than one business area regarding this documentation, due to different computer systems and processing procedures. We apologize for any inconvenience, and we appreciate your patience.
Disclaimer: Although all due care was taken in the creation of these answers, Scotiabank will not accept any liability as a result of any error or inaccuracy. If you think that CRS may apply to you, you should consult appropriate tax or legal counsel.
Referred to as foreign jurisdiction indicators, these include but are not limited to foreign tax jurisdiction, foreign address; foreign telephone number; and foreign place of incorporation or organization.