What information is exchanged in the CRS exchange account? What is the principle of automatic bank information exchange? What is the safest way to open overseas?
CRS (Common Report Standard) and AEOI (Automatic Exchange of Information) are one of the most troubling issues for those who have multiple nationalities or reside in multiple foreign countries. Whether you have ever invested in foreign stocks or exchanged your digital currency for fiat currency overseas, you may have unknowingly fallen into the scope of automatic exchange of financial assets. Whether you have ever invested in foreign stocks, exchanged digital currency for fiat currency overseas, or invested in overseas real estate, you may have unknowingly touched the scope of automatic exchange of financial assets. This article is going to share from the actual case:
- Requirements for the automatic exchange of bank information overseas
- OECD Organization for Economic Cooperation and Development regulations
- Has China ever asked overseas banks for citizens' information?
Requirements for the automatic exchange of bank information overseas
Previous Post:What is a tax resident? What is the relationship between a tax code and opening an overseas bank account?In addition, there is a proposal to explain in detail how the tax identification number (Tax Identification Number, also known as the tax identification number) is based on the OECD regulations, as the basis for identification, all banks around the world to hold any passport is required to submit the tax identification number when opening a bank account, if you do not provide the TIN account may be suspended at any time can not be transacted.
Example: Implementing Rules for Bank Information Exchange in Turkey
Turkey's banks announced on September 6, 2020 due to the OECD (Organization for Economic Cooperation and Development),G20 (group of 20)respond in singingEUThe Multilateral Convention on Mutual Administrative Assistance in Tax Matters was born out of an international effort to combat tax evasion. As of today, it has been signed by 136 countries, including Switzerland, Norway, Brazil and India, as well as EU member states. Turkey signed the convention in 2011.In 2014, the Turkish Tax Administration (TÜİK) published on its official website the "Guidelines for the Application of Automatic Exchange of Financial Account Information in Tax Matters" explaining the standards set by the OECD in 2014. Some of the highlights are listed below.
- Turkey will not exchange information to any party until 2019
- The Automatic Exchange of Information (AEOI) rules include financial accounts held by Turkish financial institutions. Information on immovable property and certain movable property (e.g. vehicles) is not exchanged.
- of account holders and institutional controllers (partners or managers)Name, address, country of residence with right of retention, his/her tax identification number, year-end balance and total payments on the account(Includes payments made to the account during the year)Interest, dividends, income from sale of financial assets held in the account) will be exchanged.
- Financial accounts within the scope are divided into five categories:
- deposit account
- escrow account
- debts and partnership interests,
- Cash value of insurance
- Regular payment contracts (e.g., annuities).
- Of all account types.The year-end balances of the accounts are exchanged:: Information on the source of account balances is not covered by the automatic exchange of information
OECD Organization for Economic Cooperation and Development regulations
OECD is the multinational organization that developed the Automatic Exchange of Financial Account Information (AEIFI) and the CRS. Organization for Economic Cooperation and Development, OECD, in its publicdatabasesThere is a 311-page guideline on the automatic exchange of financial account information, with a note on page 96 on jurisdictions of residence.
For dyads identified as having multiple jurisdictions of residence, the reportable jurisdiction of residence is the dyad'sAll residential jurisdictionsThe
and on page 98
Financial institutions are required to report account balances or values if the account is closed during the year or period ofBalance or value at closure of reporting account. Accounts with a negative balance or value must be reported as having an account balance or value equal to zero. For cash value insurance or annuity contract accounts, theThe financial institution must report the cash value or surrender value of the accountThe
Example: CRS and Automatic Exchange of Information for Bank of China Hong Kong
To enhance tax transparency and combat cross-border tax evasion, more than 100 jurisdictions have committed to implementing the Automatic Exchange of Financial Account Information ("AEOI") in accordance with the CRS "Common Reporting Standard" issued by the Organization for Economic Cooperation and Development ("OECD"). "). If you are a tax resident in one of the tax jurisdictions, banks are required to report annually to theInland Revenue Department (Hong Kong)Report your account information and then the Hong Kong Inland Revenue Department will exchange account information with you.
How does BOC determine a client's "tax residency"?
For accounts opened prior to January 1, 2017, the bank will need to determine the customer's tax jurisdiction based on existing account information. The bank may require aSelf-Certification Formto confirm the tax jurisdiction. For new accounts opened on or after January 1, 2017, the bank will need to obtain theSelf-certificationDetermine the tax jurisdiction.
Has China ever asked overseas banks for citizens' information?
Who is a tax resident of China
- Foreigners who spend 183 days a year in China, or
- who have a residence in China.Means that for reasons of domicile, family relations, economic interests, etc.Habitual residence in China.
Therefore, in the legal point of view, Chinese people with household registration are tax residents of China, with a Chinese household license to open a bank account, as long as the bank identified you as the target of China's tax investigation, may face automatic exchange of information back to China.
Reminder: no matter where you live, you should file an honest tax return with your tax jurisdiction.
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