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.

ICRICT issued an opinion on the lack of progress in tackling tax havens

On 4 November 2018, the Independent Commission for the Reform of International Corporate Taxation (“ICRICT”) released an opinion on the progress of tackling the secrecy that facilitates the hiding of wealth in tax havens , including the U.S. signing up for the OECD Common Reporting Standard (“CRS”) (Link).

The ICRICT concludes that, a year since the Paradise Papers, the world has not made sufficient progress to tackle the secrecy that facilitates the hiding of wealth in tax havens. With 10% of global GDP estimated to be hidden in tax havens, and inequality rising both in developed and developing countries, the lack of progress is concerning.

Specific topics analyzed by the ICRICT are:

 

  • The failure to force all tax havens to establish public registers of beneficial ownership of companies, trusts and foundations, allows the tax haven industry to keep on flourishing.
  • Efforts by the EU to create a tax haven list has been mired by its own secrecy process in the way jurisdictions have been judged and the decision not to assess EU tax havens, something we hope will change soon.
  • The call to end corporate tax secrecy for multinationals by ensuring all multinational companies make country by country data publicly available remains unanswered.
  • The failure of the US to sign up to the OECD Common Reporting Standard and fully provide equivalent levels of reciprocal automatic information.

The ICRICT opinion is also available in Spanish (Link), Portuguese (Link) and French (Link).

Japan obtains data on over 500,000 foreign accounts

During the months of September and October 2018, the National Tax Authority in Japan (“NTA”) collected financial information on over 500,000 foreign accounts under the Common Reporting Standard (“CRS”). Such financial information were reported from 64 different countries worldwide. Furthermore, Japan provided financial information on 90,000 accounts to 58 countries, also under the CRS. Moreover, the volume of the exchanged information is expected to increase in the upcoming weeks as the information exchange in Japan is still in progress.

The number of accounts reported to the NTA is quite impressive, especially when compared to roughly 9,000 accounts reported by Japanese citizens in 2016 through filings legally required for anyone keeping over 50 million yen in foreign assets.

The exact number, as of 31 October 2018, of accounts reported to the NTA and the number of accounts reported by the NTA, as well as further information on the CRS in Japan can be found on the Japanese National Tax Authority’s website (Link-Japanese).

Portugal amends list of excluded accounts under CRS

On 19 October 2018, the Ministry of Finance in Portugal released “Regulation 282/2018” regarding the list of excluded accounts under the Common Reporting Standard (“CRS”) in Portugal (Link-Portuguese). This new regulation amends “Regulation 302.B/2016”, which includes the list of excluded accounts (Link-Portuguese).

Starting from 19 October 2018, retirement saving plans are no longer included on the list of excluded accounts and must be reported under CRS.

Russia releases CRS FAQs

On 12 October 2018, the Russian Government issued Frequently Asked Questions (“FAQs”) (Link-Russian) on the Common Reporting Standard (“CRS”). The document topics such as:

  • Information on Tax Identification Numbers;
  • List of excluded accounts;
  • Identification of accounts and information which need to be reported; and,
  • Information on how to report under CRS.

UK plans to update its offshore tax compliance strategy

On 29 October 2018, Her Majesty’s Revenue & Customs (“HMRC”) released the 2018 Budget including statements on the countries’ offshore tax compliance strategy (Link).

As the United Kingdom (“UK”) prepares to leave the EU, the government is taking further steps to set out a new path for public spending ahead of the Spending Review in 2019. The UK government remains committed to tackling tax avoidance and evasion, aggressive tax planning and non-compliance and plans to publish an updated offshore tax compliance strategy. This will build on the substantial progress the UK has made in tackling offshore tax evasion and non-compliance since the government’s previous strategy was published in 2014.