What is the Common Reporting Standard
The Common Reporting Standard (CRS) is the single global standard for the collection, reporting and exchange of financial account information on foreign tax residents. Under it, banks and other financial institutions will collect and report to us financial account information on non-residents. We will exchange this information with the participating foreign tax authorities of those non-residents.
In return, we will receive financial account information on Australian residents from other countries' tax authorities. This will help ensure that Australian residents with financial accounts in other countries are complying with Australian tax law and act as a deterrent to tax evasion.
Who does the CRS apply to
The CRS applies to foreign tax residents and to financial accounts held by entities (such as companies, trusts, partnerships and associations). If an individual controls or beneficially owns an entity, or has a specific connection to the entity, then they may be identified and reported in connection with the entity's financial accounts.
How does it affect financial institutions
Financial institutions such as banks and other deposit taking institutions, custodial institutions, investment entities, and specified insurance companies are required to report under the CRS.
What do you need to do?
You should ensure your clients accurately disclose all their offshore assets and foreign source income.
We receive information about Australian tax residents who have an account with a financial institution overseas from the tax authority of that jurisdiction.
If your client does not disclose their foreign source income, they will be liable to penalties and interest charges.
What this means for your clients
Australia is one of many countries that has committed to new global standards on the automatic exchange of financial account information. This information is required by law to be collected by financial institutions around the world for reporting to tax authorities. It is then automatically exchanged with us each year. The exchange of this information helps make sure everyone pays the right amount of tax.
In September 2018, we received the first round of data from foreign jurisdictions. The data contains information on financial accounts held by Australian tax residents and entities overseas. Financial accounts that will be reported to us include:
- depository accounts
- custodial accounts
- debt or equity accounts
- cash value insurance and annuity contract accounts.
The data will contain details about each financial account including:
- the account balance
- interest payments
- dividend payments
- proceeds from the sale of assets
- other income.
Guidance
Find out more about the:
- Automatic exchange of information guidance – CRS and FATCA
- Common Reporting Standard for the automatic exchange of financial account information
If you have further questions regarding the CRS please contact the CRS Project team by emailing CRS@ato.gov.au.
Disclaimer
This information is to help you and your clients understand their obligations under the AEOI laws. It does not constitute a ruling or binding legal advice.