Wider Approach for all non-residents


The OECD recommends countries collect information for all residents, not only for countries which have a Competent Authority Agreement
1. The OECD CRS Implementation Handbook states it would not be efficient for financial institutions to later have to reestablish whether an account is reportable each time new automatic exchange relationships are entered into.

To minimise these costs jurisdictions could therefore consider, for example:
  • requiring or making it possible as an option for financial institutions to collect and retain the information, ready to report, in relation to all non-residents rather than just residents of those jurisdictions with which the implementing jurisdiction has concluded a CAA; or
  • requiring or making it possible as an option for information to be collected and a record maintained, ready to report, in relation to all residents of those jurisdictions with which the implementing jurisdiction has an underlying legal exchange relationship that permits for automatic exchange (e.g. a DTC or other signatories of the Convention), including where a CAA has not been concluded.
  • in either of these cases the financial institutions could also report all the information held to the tax authority, rather than only the information currently required to be exchanged, which would again require less sorting of information by the financial institution.
2. Such wider approaches (and other possible options) could significantly reduce costs for financial institutions (and possibly tax administrations), because they would not need to perform additional due diligence procedures to identify their account holders each time a jurisdiction enters into a new automatic exchange relationship.
3. Some tax advisors are incorrectly advising their clients they have an extra year in 2017 when late adopters ahve not yet signed CAAs with their client's tax authorities yet. These advisors are unaware of the impact of the wider approach to implement the Standard.