Common Reporting Standard (“CRS”)

CRS Self Certification and Completion Guideline

 

1.
Common Reporting Standard (“CRS”)

  • To enhance tax transparency and combat cross-border tax evasion, over 100 jurisdictions have committed to implement Automatic Exchange of Financial Account Information (“AEOI”) based on the “Common Reporting Standard” (“CRS”) released by the Organisation of Economic Co-operation and Development (“OECD”).
  • CMB Wing Lung Bank Limited (the Bank”) is required by the Inland Revenue (Amendment) (No. 3) Ordinance 2016 (“the Amendment Ordinance”) to identify our customers’ tax residency. If you are a tax resident in a Reportable Jurisdiction, the Bank is required to report your account information to the Hong Kong Inland Revenue Department (“HKIRD”) on an annual basis. The HKIRD will then exchange the account information with the tax administration of the reportable jurisdictions.

2.
Who will be the reportable persons for AEOI?

  • A financial institution resident (or known as “located”) in Hong Kong will identify the financial accounts held by individuals or entities liable to tax by reason of residency in the AEOI partner jurisdictions. The financial institution will collect and furnish to the Inland Revenue Department (“IRD”) information of the identified account holders (individual or entity) and the financial account information on an annual basis. IRD will then transmit the information to the tax administration of the relevant jurisdiction of which the account holder is tax resident.

3.
How will individuals and entities be affected by AEOI?

  • Reporting financial institutions will be liable for reporting on financial accounts held by reportable persons. Hong Kong taxpayers who are not tax residents of any territory outside Hong Kong will not be reported. The Inland Revenue Ordinance (“IRO”) requires the reporting financial institutions to apply due diligence procedures to collect all required information and documentation from account holders. To identify reportable persons, reporting financial institutions may ask account holders to complete self-certification forms for verification of their tax residency status. The self-certifications will be kept by the reporting financial institutions for a period of six years.

4.
What is a self-certification?

  • This is a formal declaration that the account holder makes in connection with his/her tax residency.
  • According to the due diligence procedures set out in the Amendment Ordinance (which are based on the international standard required), self-certifications would be required from account holders for all new accounts (i.e. accounts opened on or after 1 January 2017). As for pre-existing accounts (i.e. accounts opened before 1 January 2017), if a reporting financial institution has doubts about the tax residency of an account holder, it can seek a self-certification from the account holder to verify its tax residency.
  • If the account holder has doubts about his/her tax residency, he/she may consider seeking professional advice.
  • In OECD’s AEOI portal, you can find more information regarding the tax laws of different jurisdictions for defining tax residency. The website address is https://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-residency/#d.en.347760.
  • An account holder who knowingly or recklessly provides a statement that is misleading, false or incorrect in a material particular in making a self-certification to a reporting financial institutions is liable on conviction to a fine at level 3 ($10,000). IRD may check the details of the self-certification, if necessary.

5.
What if there are changes in circumstances that affect my tax residency?

  • Account holders should advise the reporting financial institutions of any change in circumstances which affects their tax residency status or causes the information contained in a self-certification to become incorrect. Generally, account holders should provide financial institutions with a suitably updated self-certification form within 30 days of such change in circumstances.

6.
If I am a tax resident of an AEOI partner jurisdiction and hold a financial account at one of the financial institutions in Hong Kong, what information will be exchanged?

  • As far as personal data is concerned, the information to be exchanged includes name, address, jurisdiction of residency, taxpayer identification number (“TIN”), and the date and place of birth. As for financial account data, it includes the account number, account balance or value (year-end), and the gross amount of interests, dividends and sale proceeds of financial assets as appropriate for the year concerned.

7.
How and where can customers get additional assistance regarding AEOI?

  • The IRD has issued guidance and reference materials such as pamphlets and frequently asked questions (“FAQs”). Customers should refer to the IRD website for more details: http://www.ird.gov.hk/eng/tax/dta_aeoi.htm.
  • In addition, customers may refer to the OECD’s AEOI portal for information regarding the definition of tax residency and TINs in different jurisdictions. The website is http://www.oecd.org/tax/automatic-exchange/crs- implementation-and-assistance/.
  • Please note that banks are not to offer any tax advice, notably the determination of tax residency or entity classification, to their customers. As such, for any tax related questions that cannot be resolved, customers should seek advice according to their own circumstances from professional legal and/or tax advisors.

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