TMF Group, a leading provider of global business services, has launched Common Reporting Standard (CRS) services to assist financial institutions fulfil increased compliance requirements, as part of the worldwide initiative to reduce tax evasion through the automatic exchange of financial account information.
No two countries are alike, and while the CRS provides a consistent approach to what financial institutions are required to participate; how financial information is represented, the accounts reported on, and due diligence procedures; implementation will vary locally across the different jurisdictions.
Jeroen van Zanten, Global Head of Trust and Corporate Services at TMF Group, explains, “transparency is a welcome and an unstoppable force; with it comes greater accountability and integrity with corporates. All these changes will positively impact systems and processes, which require enhanced controls”.
To date, the automatic exchange of financial account information has been agreed to by more than 100 jurisdictions, and the global exchange of information will start in 2017 for the 2016 book year. In 2017, a second group of countries will implement the CRS, with the exchange of information starting in 2018.
“Financial institutions may now be required to report relevant information on all foreign accounts to the tax authority, inclusive but not limited to individuals with foreign debt or equity interests, foreign deposit accounts and custody accounts”, added Mr van Zanten.
“It is important for financial institutions to be aware of compliance requirements as authorities will use appropriate measures under domestic law to address errors or non-compliance. Further, management of entities under the scope may be held liable if the entity does not comply with CRS laws in a correct and timely manner”, concluded Mr van Zanten.
In response to the CRS initiative, TMF Group’s CRS services which form part of the Global Information Reporting business unit, include:
- CRS entity classification
- CRS onboarding of new entity accounts and new individual accounts
- CRS pre-existing account due diligence and enhanced file review
- CRS reporting