About Banking

Common Reporting Standard (CRS)

The Common Reporting Standard (CRS) is a global framework developed by the OECD (Organization for Economic Co-operation and Development) to combat tax evasion by automatically exchanging financial account information between participating countries.

How CRS Works

• Banks, financial institutions, and investment firms collect and report account details of foreign tax residents to their local tax authorities.
• These authorities automatically share this data with the account holder’s home country.
• Information includes account balances, interest, dividends, and other income.

Who Is Affected?

• Individuals and businesses with offshore bank accounts or investments in foreign financial institutions.
• CRS applies in over 100 countries, including the UK, EU nations, UAE, and Singapore.
• The U.S. is NOT part of CRS but operates under FATCA (a similar U.S. tax law).

Why It Matters

• CRS makes offshore banking less private, reducing tax evasion opportunities.
• Those using offshore accounts for legal tax planning need compliant structures (e.g., offshore trusts, territorial tax residencies).

Automatic Exchange of Information (AEOI)

The Automatic Exchange of Information (AEOI) is a global initiative that allows tax authorities to automatically share financial account information to combat tax evasion. It is the foundation of the Common Reporting Standard (CRS), developed by the OECD.

How AEOI Works

• Financial institutions (banks, investment firms, insurance companies) collect account details of foreign tax residents.
• This information includes balances, interest, dividends, and asset holdings.
• The data is sent to the account holder’s home country’s tax authority once a year.

Who Is Affected?

• Individuals and businesses with offshore bank accounts or investments.
• Over 100 countries participate, including the UK, EU nations, UAE, Singapore, and Hong Kong.
• The U.S. is NOT part of AEOI but enforces its own system, FATCA (Foreign Account Tax Compliance Act).

Key Implications

• Offshore banking is less private due to mandatory reporting.
• Those with international assets need compliant, legal tax structures.
• Residency or citizenship in non-CRS countries can offer strategic advantages.