Automatic Exchange of Information (AEoI) Services for CRS, FATCA and MDR / DAC6
The Automatic Exchange of Information (AEoI) in tax matters is a way to exchange information between countries and demonstrates a worldwide approach to international regulatory and tax transparency. KENDRIS offers services with regard to the reporting regimes Foreign Account Tax Compliance Act (FATCA), the Common Reporting Standard for Automatic Exchange of Financial Account Information in Tax Matters (CRS) and the Mandatory Disclosure Rules (MDR) regime on mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements (DAC6) which has been introduced in the EU.
The intergovernmental implementation of the 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 OECD has followed with CRS to improve tax compliance worldwide and move closer towards complete tax transparency. This has 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. In 2018, the OECD published the model Mandatory Disclosure Rules (MDR) for addressing CRS Avoidance Arrangements and Opaque Offshore Structures. In the same year, the EU directive most commonly referred to as DAC6 entered into force. DAC6 is based on the OECD’s MDR, however it is much wider in scope. It covers not only CRS avoidance and the use of opaque structures, but also potentially aggressive tax planning schemes.
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.
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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 wide global reach with around 100 jurisdictions currently exchanging information and a large number of jurisdictions which have committed to implementing CRS in the coming years. The exchange of information is intended to enable correct taxation of income and assets, and is an effective tool against tax evasion. Learn more about CRS in our CRS reporting guide.
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Mandatory Disclosure Rules (MDR) and DAC6
The OECD introduced the Mandatory Disclosure Rules (MDR) to provide tax administrations with information on arrangements that circumvent CRS reporting and on structures that disguise the beneficial owners of assets held offshore by making use of opaque structures. The EU implemented the MDR by adopting EU Council Directive 2018/822 (DAC6). DAC6 is much wider in scope covering also potentially aggressive cross-border tax planning schemes (Arrangements) which involve EU taxpayers, assuming certain Hallmarks are met. DAC6 requires EU intermediaries, or in certain cases EU taxpayers, to report such arrangements to the relevant tax authority, and the EU tax authorities will exchange the information with each other.
How can we help?
KENDRIS has a team of experts that really understand FATCA CRS and MDR. With our AEOI reporting services, 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, CRS and MDR/DAC6 on tax disclosure and international reporting for both individuals and corporate entities. We have extensive experience working with financial institutions, from helping them to fulfil their regulatory due diligence obligations to the successful, automated submission of their regulatory reports.
Do not hesitate to contact our regulatory experts.