Monaco expands the list of Reportable and Partner Jurisdictions

On 2 November 2018, the Government Princier of Monaco published “Ministerial Order 2018-1007” (Link-French), which includes the latest update of the reportable jurisdictions list under the Common Reporting Standard (“CRS”).

The complete list of reportable jurisdictions in the year 2018 encompasses the following countries: Andorra, Austria, Belgium, Bulgaria, Cyprus, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Ireland, Italy, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mauritius, Mexico, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and United Kingdom.

In addition, the list of reportable jurisdictions in the year 2019 contains additional 26 countries: Argentina, Australia, Azerbaijan, Brazil, Canada, Chile, China, Faroe Islands, Greenland, Guernsey, India, Indonesia, Iceland, Jersey, Malaysia, Isle of Man, New Zealand, Norway, Panama, Russia, San Marino, Saudi Arabia, Seychelles, Singapore, Switzerland and Uruguay.

Moreover, the Monaco partner jurisdictions list has also been updated and the complete list includes:Anguilla, Argentina, Australia, Barbados, British Virgin Islands, Canada, Cayman Islands, Chile, China, Faroe Islands, Guernsey, Hong Kong, India, Iceland, Jersey, New-Zealand, Norway, Panama, San Marino, Saint Kitts and Nevis, Samoa, Seychelles, Singapore, South Africa and Switzerland.

The partner jurisdictions are those with which Monaco has begun negotiations on moving to automatic exchange. A partner jurisdiction is not yet a jurisdiction with which Monaco has undertaken to exchange information. The purpose of the list of partner jurisdictions is to enable Monegasque financial institutions to apply simplified due diligence procedures when their clients are residents in these jurisdictions.

More information on the automatic exchange of information (“AEOI”) in Monaco can be found in the Frequently Asked Questions on the government’s website (Link).

Canada makes progress in identifying Canadians trying to hide their assets overseas

On 13 November 2018, the Canada Revenue Agency (“CRA”) released a statement on Canada’s commitment on combating offshore tax evasion and aggressive tax avoidance (Link).

The CRA states that strong international partnerships are a key to success. Thanks to historic investments in the last three federal Budgets, better tools and approaches in their compliance activities are helping to get more data and allowing better identification of tax evasion and aggressive tax avoidance.

The Common Reporting Standard (“CRS”) was implemented in Canada in 2017 and includes the participation of more than 100 jurisdictions. It provides the CRA with information on Canadians’ overseas financial accounts. Under the CRS, Canadian financial institutions are required to identify non-residents’ financial accounts and to provide account details annually to the CRA. The CRA then shares this information with foreign jurisdictions and in turn, the CRA receives the same type of information from other jurisdictions.

Under this initiative, the CRA expects to receive information from more than 80 international partners and has committed to sending information to more than 60. The number of exchange partners is expected to increase in the coming years. Information received will help the CRA identify financial accounts held in other jurisdictions to ensure that tax residents of Canada are meeting their Canadian tax obligations.

Participating in the CRS honours Canada’s commitment to its Organisation for Economic Co-operation and Development (“OECD”) and Global Forum on Transparency and Exchange of Information for Tax Purposes (“Global Forum”) partners to share more data in the fight against offshore tax evasion and aggressive tax avoidance.

Canada continues to be a leader in international collaboration as a member of the expanded Joint International Taskforce on Shared Intelligence and Collaboration (“JITSIC”). This network of 38 countries works closely and actively with other tax administrations to coordinate tax compliance activities across the spectrum of international tax risks. This expertise has allowed the CRA to participate and lead JITSIC expert working groups, including the development of a strategy to identify and stop promoters of abusive tax schemes.

Hong Kong Inland Revenue Amendment Bill gazetted

On 31 October 2018, the Information Services Department in Hong Kong announced the “Inland Revenue (Amendment) (No. 7) Bill 2018” (“Bill”), which was gazetted on 2 November 2018 (Link).

The Bill seeks to:

  • align the tax treatment of financial instruments with their accounting treatment;
  • allow the deduction of interest expenses payable to overseas export credit agencies;
  • refine the provisions that implement the arrangement for automatic exchange of financial account information in tax matters (AEOI);
  • avoid potential double non-taxation of income of visiting teachers and researchers; and,
  • revise the meaning of the sibling relationship.

In addition to changes in accounting standards, the Bill also includes refinements to the automatic exchange of information (“AEOI”) regime implemented since 2017, so as to closely follow the requirements promulgated by the Organisation for Economic Co-operation and Development (“OECD”). According to the Hong Kong representative, “The amendments related to the AEOI are particularly crucial for Hong Kong to preserve its competitiveness and reputation as an international financial and business center”.

The Bill was introduced into the Legislative Council on 14 November 2018.

Switzerland publishes updated Q&A on AEOI

On 8 November 2018, Switzerland updated its Questions and Answers (“Q&A”) on the automatic exchange of information (“AEOI”).

Questions on the Swiss website are gathered by the Swiss “AIA-Qualifikationsgremium”, which is the AEOI Qualification Committee established on 1 December 2016. This committee is led by the Swiss Federal Tax Administration (“FTA”) and the State Secretariat for International Financial Matters (“SIF”).

The Q&A deals with questions arising from the implementation of the AEOI in Switzerland and is available in German (Link-German), French (Link-French) and Italian (Link-Italian).

Monaco updates list of reportable jurisdictions

On 2 November 2018, the Government Princier of Monaco published “Ministerial Order 2018-1007” (Link-French), which provides an updated list of reportable jurisdictions under the Common Reporting Standard (“CRS”).

The list of reportable jurisdictions provided in the Article 1 of “Ministerial Order 2016-784” of 20 December 2016, was amended to include an additional 23 countries (Link-French). Those additional countries are: Argentina, Australia, Azerbaijan, Brazil, Canada, Chile, China, Faroe Islands, Greenland, Iceland, the Isle of Man, Malaysia, Norway, New Zealand, Panama, Russia, San Marino, Seychelles, South Africa, Saudi Arabia, South Korea, Singapore and Uruguay.

More information on the automatic exchange of information (“AEOI”) in Monaco can be found in the Frequently Asked Questions on the government’s website (Link).

IRS final reminder: QI (including QDD), WP, WT application deadline for 2018

On 5 November 2018, the U.S. Internal Revenue Service (“IRS”) released Issue Number 2018-14, which is the final reminder on the deadline for all Qualified Intermediaries (“QI”), including Qualified Derivatives Dealer (“QDD”), Withholding Foreign Partnership (“WP”) and Withholding Foreign Trust (“WT”) applications for the year 2018 (Link). The deadline is 16 November 2018.

All applicants that desire to have an agreement in effect in 2018 must submit their applications through the Qualified Intermediary/Withholding Foreign Partnership/Withholding Foreign Trust Application & Account Management System (“QAAMS”) no later than 16 November 2018, to allow sufficient time for processing by year end. Applicants must have obtained a Global Intermediary Identification Number prior to submitting their applications, if needed. Information on the effective date of an agreement for a new applicant can be found in the section 2.22 of the QI Agreement in Rev. Proc. 2017-15 (Link), or section 12.01(a) of the WP, or WT Agreement in Rev. Proc. 2017-21 (Link).

IRS Planned System Maintenance

On 7 November 2018, the U.S. Internal Revenue Service (“IRS”) announced a planned Veterans Day weekend systems maintenance. The IRS will conduct maintenance on several electronic systems, including e-Services, over the Veterans Day weekend beginning 11 November 2018, at 8:00 a.m. ET through 12 November 2018, at 6:00 p.m. ET.

E-Services and the Secure Mailbox will be unavailable during this time.

If users need to retrieve products from their mailboxes, they should plan to do so before the outage.