The “Basics” of Common Reporting Standards

Cross-border tax evasion is one of the vexed issues faced by the national governments worldwide. As globalisation of business transactions continues to advance, in order to address tax evasion and avoidance through offshore financial structures, the Organisation for Economic Cooperation and Development (“OECD”) developed the “Common Reporting Standards” (“CRS”) in July 2014, a global reporting standard for automatic exchange of financial account information. Commonly referred as Global FATCA, the CRS is based on the US Foreign Account Tax Compliance Act (“FATCA”), however, the scope for CRS is much greater than for FATCA to accommodate the requirement for various countries.