The CRS requires financial institutions and entities to identify and report certain information about their account holders to the tax authorities in the jurisdiction where the account holder is a resident. The reported information includes the account holder's name, address, and tax identification number, as well as the account balance and any income generated by the account.
The CRS applies to a wide range of financial institutions, including banks, custodial institutions, certain types of investment entities, and specified insurance companies. Financial institutions are also required to conduct due diligence procedures to identify their account holders and report any suspicious transactions.
The CRS is based on the principle of reciprocity, which means that participating jurisdictions agree to exchange information automatically with each other on an annual basis. To date, over 100 jurisdictions have committed to implement the CRS and are in various stages of implementation.
The CRS is a powerful tool in the fight against tax evasion and helps tax authorities to identify and recover unpaid taxes. It also promotes greater transparency and fairness.
In every job throughout my career I’ve worked on CRS and FATCA solutions, starting out with small changes and fixes to existing implementations to helping build out an entire platform for making submissions (ReportGenie!). Throughout that time, I’ve been keenly interested in finding a way to take these sprawling specifications and abstract away the complexity, making it as clear and simple as possible to map the needs of a business to the requirements of the various tax authorities.
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