On 14, 19 and 21 March 2019, PwC’s CITT Compare Tool was updated to include the latest content from Brazil, Bulgaria, France Guernsey, India, Ireland, Slovakia, South Africa and South Korea. Please take this opportunity to re-run reports for those countries and use the latest information within your projects.
On 27 February 2019, Malta released version 2.0 of the “Guidelines for the implementation of the mandatory automatic exchange of information in the field of taxation (“DAC2”) in Malta and the Common Reporting Standard (“CRS”)” (“Guidelines”) (Link). According to the Guidelines:
“The DAC2 and CRS have been implemented into Maltese legislation by virtue of LN 384 of 2015 entitled the Cooperation with Other Jurisdiction on Tax Matters (Amendment) Regulations, 2015, which regulations amend the Cooperation with Other Jurisdiction on Tax Matters Regulations with effect from 1st January 2016. In line with regulation 45 of the afore-mentioned regulations, the DAC2 and CRS will be implemented uniformly into Maltese legislation.”
In addition, on 27 February 2019, the Commissioner for Revenue of Malta published version 4.0 of the “Guidelines for the implementation of the Foreign Account Tax Compliance Act (“FATCA”) Agreement and the FATCA Regulations in Malta issued in terms of Article 96(2) of the Income Tax Act (Chapter 123 of the Laws of Malta)” (“Guidelines”) (Link). This amendment brings the changes pertaining to the completion of data elements for recalcitrant account holders into force.
On 13 March 2019, the Australian Taxation Office (“ATO”) issued an update to the Common Reporting Standard (“CRS”) reporting process (Link). Over the next few months, the ATO will be updating a number of validation rules for 2018 CRS reports due by 31 July 2019. The updated validations will trigger ‘error’ messages and require correction before a successful lodgment can be accepted. Users must ensure that their 2018 CRS reports conform to the following validation rules:
- Namespaces must be provided in your CRS files. Refer page 290 of the CRS XML Schema User Guide (Link).
- The Account Balance must be zero if an account was closed during the reporting year.
- The ReportingFI ResCountryCode element must be AU.
- The BirthDate element cannot be greater than the current date or before 1900.
- Controlling Person/s must be provided when “Account Holder = Organisation & Account Holder Type = CRS101”.
- Controlling Person/s must be omitted when “Account Holder = Organisation & Account Holder Type = CRS102 or CRS103”.
Recently, in March 2019, the text of the Competent Authority Agreement on Automatic Exchange of Information (“AEOI”) between the United Kingdom and the Isle of Man has been released (Link). This agreement, signed on 21 January and 22 February 2019, forms the basis of the exchange of information between these nations under the Common Reporting Standard.
In addition, the Isle of Man AEOI Industry Advisory Notice to all Isle of Man Financial Institutions and third parties, released in February 2019, is now available on the Isle of Man website (Link).
On 29 March 2018, the South African Revenue Service (“SARS”) announced the opening of the Third Party Data Annual Submission process for the period 1 March 2018 – 28 February 2019. The process is open from 1 April 2019 to 31 May 2019. Details on submission dates and the various reportable data types can be found in the table provided on the SARS website (Link).
On 20 March 2019, the Inland Revenue Authority of Singapore (“IRAS”) published an updated Common Reporting Standard (“CRS”) Entity Classification self-review tool to determine respective CRS entity classification, and check the requirement to register for CRS (Link).
For more details on CRS registration requirements, please refer to the IRAS CRS Registration FAQs (Link) and the Quick Guide to CRS Registration (Link). The application for CRS registration will take about three weeks to be processed. Once the application is processed, IRAS will send an email to the Point of Contact or individual trustee to inform him/her of the registration outcome. Reporting SGFIs can also check on their CRS registration status using the Check CRS Registration Status e-Service (Link).
On 13 March 2019, the Revenue Service of Guernsey published circular no. 10, providing important information on the process for notifying the Revenue Service of changes to a company’s jurisdiction of residence (Link). With effect from 1 January 2019, a company will be treated as tax resident in Guernsey in a year of charge if it is controlled in Guernsey, or is centrally managed and controlled in Guernsey in that year of charge, or it is incorporated in Guernsey and has not been granted an exemption from tax for that year of charge under any Ordinance made under section 40A of the respective law (Link). A tax resident company will be required to file a company tax return and will be subject to the substance requirements, such as tax transparency, if it carries on geographically mobile financial and other service activities. For further information on the activities, legislation and guidance the Revenue Service in Guernsey created an information webpage (Link).
On 18 March 2019, the Global Forum on Transparency and Exchange of Information for Tax Purposes announced that it has published seven outcomes of the second round of a new and enhanced peer review process (Link). These processes are aimed at assessing compliance with international standards for the exchange of information on request between tax authorities.
The seven jurisdictions reviewed – Hong Kong (Link), Liechtenstein (Link), Luxembourg (Link), the Netherlands (Link), North Macedonia (Link), Spain (Link) and the Turks and Caicos Islands (Link) were rated “Largely Compliant”.
The Global Forum, which will be celebrating its 10th year anniversary later this year, is the leading multilateral body mandated to ensure that jurisdictions around the world adhere to and effectively implement both the standard of transparency and exchange of information on request and the standard of automatic exchange of financial account information. This objective is achieved through a robust monitoring and peer review process. The Global Forum also runs an extensive technical assistance program to provide support to its members in implementing the standards and helping tax authorities to make the best use of cross-border information sharing channels.
Additional information on the Global Forum, its peer review process, and all reports to date can be found on the OECD’s website (Link). For further information, journalists should contact Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration, (+33 6 2630 4923) or Dónal Godfrey, Deputy Head of the Global Forum Secretariat (+33 1 4524 8743).
On 20 March 2019, the first beneficial ownership toolkit (Link) was released in the context of the OECD’s Global Integrity and Anti-Corruption Forum (Link).
The toolkit, prepared by the Secretariat of the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes in partnership with the Inter-American Development Bank, is intended to help governments implement the Global Forum’s standards on ensuring that law enforcement officials have access to reliable information on who the ultimate beneficial owners are behind a company or other legal entity so that criminals can no longer hide their illicit activities behind opaque legal structures.
The toolkit covers a variety of important issues regarding beneficial ownership, including:
- the concepts of beneficial owners and ownership, the criteria used to identify them, the importance of the matter for transparency in the financial and non-financial sectors;
- technical aspects of beneficial ownership requirements, distinguishing between legal persons and legal arrangements (such as trusts), and measures being taken internationally to ensure the availability of information on beneficial ownership a series of checklists that may be useful in pursuing a specific beneficial ownership framework;
- ways in which the principles on beneficial ownership can play out in practice in Global Forum EOIR peer reviews;
- why beneficial ownership information is also a crucial component of the automatic exchange of information regimes being adopted by jurisdictions around the world.
The Toolkit is the first practical guide freely available for countries implementing the international tax transparency standards. It will be frequently updated to incorporate new lessons learned from the second-round peer reviews conducted by the Global Forum, as well as best practices seen and developed by supporting organisations.
On 12 March 2019, the Council of the European Union (“EU”) added 10 jurisdictions to the revised EU list (Link) of non-cooperative jurisdictions for tax purposes:
- Marshall Islands
- United Arab Emirates
The list includes non-EU countries or territories that failed make sufficient commitments in response to EU concerns. Separately from the list, a state of play document features the jurisdictions that responded in a sufficient manner. They needed to take effective action, such as the adoption of the automatic exchange mechanism consistent with the objectives of the Common Reporting Standard, by the end of 2019, so as not to be listed in the future.
In addition to Panama, the EU also excluded Uruguay and Peru from its black list of tax havens.