Common Reporting Standard (CRS)
The Common Reporting Standard (CRS) is a standard developed by the Organisation for Economic Co-operation and Development (OECD) for the automatic exchange of information. Guernsey joined in a joint statement issued on 28 November 2013 by 36 countries, and a further statement in March 2014 by 44 countries, committing to the early adoption of the CRS. On 6 May 2014, the OECD issued a Declaration signed by 48 jurisdictions welcoming the OECD Standard for Automatic Exchange of Financial Account Information. In total, 58 countries and jurisdictions have now formally committed to implementing the CRS for first exchange of information in 2017, in respect of accounts open at the end of 2015, and new accounts from 2016, with a further 35 jurisdictions committed to implementing the CRS by 2018.
CRS - Guidance Notes
As the OECD guides provide comprehensive commentary and examples for the CRS and Due Diligence Standards, the Guidance Notes provided by the Director should only to be considered supplementary to the OECD commentary and covering those aspects where is necessary to assist with the practical aspects of the CRS that are specific to implementation by Guernsey Financial Institutions.
This Guidance Notes includes references and quotations from the following OECD publications:
These publications should be considered as the core guidance provided for the CRS and referred to in the first instance.
The copyright owner of this material remains the OECD.
Guernsey Guidance Notes
Guernsey is committed to the adoption of the global Common Reporting Standard on Automatic Exchange of Information ("the CRS") with effect from 1 January 2016, with first reporting taking place in 2017. Guernsey is one of approximately 60 jurisdictions working to this implementation timetable, including all EU Member States (with the exception of Austria, which will have an extra year before implementation of the CRS).
The UK has indicated that it would wish to move from the existing intergovernmental agreement ("the UK IGA") that it has with Guernsey (and the other Crown Dependencies and the Overseas Territories) to the CRS, as from 1 January 2016.
A number of options exist for how the transition could be achieved, to satisfy the UK's wish to ensure that no "gaps" occurred in the data that would have been reported under the UK IGA for 2016 but which may not be reported under the CRS until 2018. After consultation with Guernsey Financial Institutions, it has been agreed with the UK that for 2016 the CRS reporting requirements should be supplemented by the provision of information on pre-existing individual low value accounts and pre-existing entity accounts in respect of UK residents. This means that the UK can receive 2016 calendar year information in 2017 solely under the CRS, thus avoiding any need for Guernsey Financial Institutions having to make separate (and possibly duplicate) returns under both the UK IGA and the CRS. I should make it clear that the intention is that due diligence already undertaken on UK reportable accounts for the purposes of the UK IGA will not need to be repeated for the CRS.
The CRS does not provide for any special arrangements, such as the Alternative Reporting Regime ("the ARR", for "Non-Doms") which exists under the IGA. As a result of the adoption of the CRS from 1 January 2016, reporting of 2016 data for all relevant UK accounts will be required in 2017 including all UK non-domiciled account holders. The ARR will therefore be available only under the UK IGA, and for 2014 and 2015 only.
We will be consulting with our legal advisers regarding the steps required to achieve this transition. Further guidance will be issued, as necessary.
Competent Authority Agreements
On 13 February 2015, the Director signed Competent Authority Agreements with the Competent Authorities in Jersey and the Isle of Man relating to the automatic exchange of financial account information, similar to, and on the same basis as, the Multilateral Competent Authority Agreement that Guernsey signed in Berlin in October 2014 ("the MCAA"). On 9 September 2015, the Director signed a similar agreement with the British Virgin Islands. As was the case with the MCAA, the bringing into effect of the Agreements with Jersey, the Isle of Man and the British Virgin Islands will be dependent on the introduction of the necessary legislation. The Agreements provide for the first exchange of information to take place in 2017 (in respect of information relating to 2016).
Background information to the MAC can be found at: http://www.oecd.org/ctp/exchange-of-tax-information/conventiononmutualadministrativeassistanceintaxmatters.htm
Multilateral Competent Authority Agreement [448kb] signed 29 October 2014