Common Reporting Standards (CRS) Self-Certification Forms and Other Information9 November 2015
CRS impacts all Irish funds from 1 January 2016. The CRS framework was first released by the OECD in February 2014 as a result of significant political will demonstrated by the G20 members. To date, more than 90 jurisdictions have publicly committed to implementation, many of which are early adopter countries, including Ireland. Section 891F of the Taxes Consolidation Act implements CRS under Irish law and regulations are expected to be enacted before the end of the current year.
From 1 January 2016 alongside the current requirement to identify and confirm the status of investors from a U.S. Tax perspective under FATCA, now there is an additional requirement to identify and confirm the tax residence status of all new and existing Investors under CRS. In this regard the Industry FATCA/CRS Working Group have drafted appropriate self-certification forms for both individuals and entities. The forms incorporate the requirements under both FATCA and CRS and are available here:
In an industry briefing last week, the Irish Revenue Commissioners (‘Revenue’) stated that self-certifications should be obtained and validated at account opening stage. Where it is not possible to validate on day one, validation of the self-certification should be completed within 90 days. Only in a limited number of exceptional circumstances, where it is not possible to obtain a self-certification on day one, one should be obtained and validated as quickly as feasible and not later than 90 days. Revenue have confirmed that failure to obtain a validated self-certification within 90 days will result in the account being reported. However, Revenue indicated that if Financial Institutions return a significant number of undocumented accounts in the annual reporting that this will be an area of focus in compliance reviews.
The office of The Data Protection Commissioner has confirmed to Revenue that Irish Financial Institutions (including Irish funds) may adopt the “wider approach” for CRS. This will allow funds to collect data relating to the country of residence and the Tax Identification Number (TIN) from all non-resident investors (i.e. not only residents of jurisdictions with which Ireland has an exchange of information agreement). The Data Protection Commissioner has also specified that;
- The wider approach can be undertaken for a set 2-3 year period pending the resolution of the final CRS list of participating jurisdictions (the position will be reviewed after this initial period),
- Financial institutions can send data for all non-resident customers to the Revenue, who will determine whether the country of origin is a participating jurisdiction and if so exchange data with them. Revenue will delete any data for non-participating jurisdictions,
- Financial institutions must provide customers information notices (as outlined below), that fully explain the collection requirements under CRS,
- Financial institutions must update their privacy/data protection notices to incorporate CRS,
- Revenue will audit / review the process as part of their CRS compliance program,
- The arrangement can be terminated by Notice of the Revenue in such circumstances where any data processing could be a breach of the Data Protection Acts or any other relevant legislation, and
- Any person who makes a Subject Access Request to a Financial Institution will be informed of the processing done under CRS by the Financial Institution.
Data Protection Notice
From 1 January 2016, to comply with the ‘Wider Approach’ under CRS, the Office of the Data Protection Commissioner has stipulated that all new customer applications should contain appropriate data protection customer information notices. These Customer Information Notices must including the following information;
- Why the data is being collected
- What will be done with the data
- What information will be reported to Revenue and inform that Revenue may exchange information with other Tax Authorities
- It should also outline where the customer can obtain further information, namely the AEOI (Automatic Exchange of Information) webpage on Revenue.ie will contain more information in this regard.
Irish Funds FATCA/CRS Working Group have been working with Revenue in relation to the obligations that CRS imposes, with a view to obtaining clarity on fund specific issues. It is expected that most issues will be clarified in the OECD CRS Commentary and Frequently Asked Questions (FAQs), which can be found on the OECD AEOI Portal. A number of Irish specific issues will be dealt with through FAQs to be issued by Irish Revenue.