Answers to the questions: What is the legal basis for the CRS (AEoI) in Switzerland? What are the reporting obligations of a Swiss reporting FI (RFI) that is in the process of being liquidated? What are the Reporting Requirements in the year of the closure of a trust account? Are there any differences between the reporting requirements in case of an FI or a Passive NFE? What is the CRS?
What is the legal basis for the CRS (AEoI) in Switzerland?
The AEoI law, the AEoI ordinance (in German) and the Swiss AEoI guidelines (in German). All of these recognise the CRS implementing legislation which require that the local CRS law must be applied consistently with the CRS Standard and Commentary. The OECD has also published Frequently Asked Questions (FAQs) and a CRS Implementation Handbook to assist in understanding CRS obligations. Both the CRS Standard and Commentary, the FAQs and the Implementation Handbook must be considered as secondary to the national (e.g. Swiss) legislation, but it serves its purpose for standard-setting and guidance.
What are the reporting obligations of a Swiss reporting FI (RFI) that is in the process of being liquidated?
The answer cannot be found in the AIAG, AIAV or the Swiss AIA guidelines, but is listed in the latest OECD FAQ (December 2017), Section I, No. 11, “Reporting Obligations of the Reporting FI that is in the process of being liquidated”. Basically it is a question whether the reporting FI has any reportable accounts and whether there is a bilateral agreement between the jurisdiction of the reporting FI (Financial Institution) and the country of the tax residency of the reportable account. If this is not the case, reporting is not possible and the question of the registration of the RFI is obsolete. If a bilateral agreement has been concluded, any liquidation and activities up to the liquidation of the account must be reported, which can only be done by a reporting FI. From this follows that an FI (in liquidation) or the liquidated FI must register on the Swiss AIA platform for the reporting. If such FIs do not register, they violate CRS frustration clauses and sanctions can be imposed.
What are the Reporting Requirements in the year of the closure of a trust account? Are there any differences between the reporting requirements in case of an FI or a Passive NFE?
In both cases the financial activity has to be reported, which includes both the fact of closing and the gross payments made to the account holder(s) during the relevant year. The only difference relates to who actually has to report. If the trust is a reporting FI, the trust reports. If the trust is a Passive NFE, it has no own reporting obligation. The CRS submission will instead be carried out by a reporting FI (e.g. bank) of which the trust is the account holder.
What is the CRS?
The Common Reporting Standard (CRS) is an information-gathering and reporting requirement for financial institutions in participating countries to help fight against tax evasion and protect the integrity of tax systems worldwide.
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