Automatic Exchange of Information (AEoI)
The Automatic Exchange of Information in tax matters is the new way to exchange information between countries and demonstrates a worldwide approach to international regulatory and tax compliance. It focuses on three reporting regimes US FATCA (Foreign Account Tax Compliance Act), UK CDOT (Crown Dependencies and Overseas Territories International Tax Compliance Regulations) referred to as UK FATCA and the CRS (the Common Reporting Standard for Automatic Exchange of Financial Account Information in Tax Matters) issued by the OECD.
The intergovernmental implementation of the US FATCA (FATCA) regime in 2010 acted as a catalyst for the move towards a truly global model for Automatic Exchange of Information (AEoI) in a multilateral context. The UK and OECD have followed with their UK CDOT and the Common Reporting Standard (CRS) respectively to improve tax compliance worldwide and move closer towards complete tax transparency. This had led to many bilateral and multilateral agreements between governments to automatically disclose and exchange information about financial accounts held by foreign tax residents in one jurisdiction to another.
FATCA (Foreign Account Tax Compliance Act)
With the Foreign Account Tax Compliance Act (FATCA), which entered into force on 18 March 2010, the USA aims to ensure that all foreign accounts held by U.S. taxpayers subject to taxation in the USA are taxed. FATCA requires annual reports from foreign financial institutions (FFI) regarding their client relationships with US persons.
Read more about FATCA
Common Reporting Standard (CRS)
The Common Reporting Standard (CRS) issued by the OECD is the result of the consistent development of the exchange of information of tax-related data among governments. The Common Reporting Standard has a wider global reach than FATCA with over 100 jurisdictions having committed to implementing CRS by 2018 at the latest. The exchange of information is intended to enable correct taxation of income and assets, and is an effective tool against tax evasion.
Read more about CRS
Crown Dependencies and Overseas Territories International Tax Compliance Regulations (UK CDOT)
The UK CDOT regime is based on US FATCA and is also referred to as UK FATCA. Financial Institutions in the British Crown Dependencies and Overseas Territories (CDOT) are required to automatically provide information on the UK taxpayers who hold financial reportable accounts in the CDOT countries to HM Revenue and Customs (HMRC) in UK on an annual basis.
Read more about UK CDOT
How can we help?
KENDRIS has a team of experts that really understand FATCA, UK CDOT and CRS. We provide support to our international clients by ensuring regulatory compliance at each stage of the lifecycle of the client’s corporate structure and the impact analysis of FATCA and CRS on tax disclosure and international reporting for both individuals and corporate entities. We have extensive experience in helping financial institutions with fulfilment of their regulatory due diligence obligations to successful, automated submission of their regulatory reports.
Do not hesitate to contact our experts.