Isle of Man issues Industry Advisory Notice on AEOI

On 4 February 2019, the Isle of Man Treasury released an Industry Advisory Notice to all Isle of Man Financial Institutions and third parties and provided important updates with respect to the Automatic Exchange of Information (“AEOI”) (Link).

  • The list of Isle of Man Reportable Jurisdictions that Isle of Man Financial Institutions can rely upon for 2018 reporting can be found in Appendix I of this notice. Isle of Man Financial Institutions and Third Parties reporting on behalf of Isle of Man Financial Institutions are reminded that they should only report in respect of Financial Accounts held by Individuals, Entities or Entities with Controlling Persons resident in the jurisdictions included in the Isle of Man Reportable Jurisdiction list for the year in question.
  • A provisional list of Isle of Man Reportable Jurisdictions that Isle of Man Financial Institutions can rely upon for 2019 reporting can be found in Appendix II of this notice.
  • All jurisdictions that have made a commitment to undertake their first CRS exchanges between 2017 and 2022, as listed in Appendix III of this notice will be treated as a Participating Jurisdiction.

Guidance Note 53 on the Common Reporting Standard (“CRS”) (Link) will be updated within the next days accordingly.

Switzerland updates CRS guidance

On 28 January 2019, Switzerland released an updated version of the guidance for the Common Reporting Standard (“CRS”) (Link-German). This Guidance provides background on the automatic exchange of information in Switzerland, and details on the scope of the Common Reporting Standard (“CRS”), financial institutions, reportable financial accounts, due diligence requirements and the reporting process.

The guidance is also available in French (Link-French) and Italian (Link-Italian).

Bankers Association in Switzerland requests clarification from U.S. Department of the Treasury

On 21 December 2018, the Swiss Bankers Association sent a request to the U.S. Department of Treasury and the Internal Revenue Service in the U.S. (“IRS”) (Link). They request the IRS to clarify that “accidental” Controlled Foreign Corporations (“CFCs”) created solely through the repeal of Internal Revenue Code (IRC) Section 958(b)(4):

  • will not be treated as US payers for purposes of Form 1099 reporting and backup withholding; and,
  • will not be disqualified from the portfolio interest exemption due to their CFC status.

The Bankers Association requests the IRS to issue a respective guidance.

Germany releases CRS Infobrief 01/2019

On 28 January 2019, the German Federal Central Tax Office (“Bundeszentralamt für Steuern” or “BZSt”) issued a newsletter: “Infobrief CRS 01/2019” (Link-German), providing updated information regarding the Common Reporting Standard (“CRS”).

  • The previously used RSASSA-PKCS1-v1_5 signature procedure has to be changed to RSASSA-PSS for the submission as of 1 December 2018;
  • The production environment for the transmission of CRS data for the reporting period 2018 will be officially available from 1 May 2019;
  • The test environment for the CRS reporting test has been made available to all users without restriction. The test environment is not available for single reporting via the BZSt-Online-Portal (“BOP”) and will be accessible during the whole reporting period with technical support from 1 April 2019 to 30 June 2019.
  • A CRS file sent via the ELMA interface may now be sent from up to 100 MB and contain up to 20,000 data records.

Sweden releases Newsletter on AEOI

On 25 January 2019, the Swedish Tax Agency released a Newsletter summarizing the latest Automatic Exchange of Information (“AEOI”) events in Sweden.

The newsletter, which is only available in Swedish language, focuses on Lex Asea dividends, which must be submitted on the basis of the Foreign Account Tax Compliance Act (“FATCA”) and the Common Reporting Standard (“CRS”).

Under Swedish Tax law, there are rules on subsidiary shares distributed as dividends to a shareholder. These rules are referred to as “Lex Asea” (Ch.42 para. 16 and 16 a Swedish Income Tax Act). The rules imply that there is no taxation on the dividend distributed. Instead, taxation occurs when the received shares are disposed of. Distributed shares can be of a Swedish or foreign subsidiary (other than in a tax haven).

Please note that the above information have been received through an email subscription. If you would like to receive the latest news regarding AEOI in Sweden, feel free to send a request to the following email address: finansiella.konton@skatteverket.se.

France introduces declarations for recalcitrant account holders

On 4 July 2018, France published implementation decree n. 2018-569 (Link-French). This declaration has been put into place in order to identify and declare account holders who do not provide the necessary information to identify their tax residences and tax identification numbers. France is one of the first countries to have a specific declaration for “recalcitrant account holders”.

This declaration is, contrary to previously reported news, not directly related to the Foreign Account Tax Compliance Act (“FATCA”) and the Common Reporting Standard (“CRS”) but represents a new, additional reporting requirement. In practice, it will apply to all account holders as Foreign Financial Institutions must report all “recalcitrant account holders”.

The implementing decree entered into force on 1 November 2018. The declaration must be submitted electronically to the French Tax Authorities (the characteristics of the electronic filing will be determined later by the tax authorities) by March 31st each year at the latest for instances noted on 31 December of the previous year.

More information on the amending finance law, the procedure of the reporting and the practical impact can be found in the Fiscal eAlert prepared by PwC Société d’Avocats in France (Link).

Malaysia updates Reportable Jurisdiction List

On 15 January 2019, the Inland Revenue Board of Malaysia (“IRBM”) updated the List of Reportable Jurisdictions under the Common Reporting Standard (“CRS”) (Link). The new list includes 63 countries.

Malaysian Financial Institutions (“MYFI”) are required to collect financial account information from all non-residents and report to IRBM those information relating to the Reportable Jurisdictions according to the timeline as stated on the CRS information webpage (Link).

To ensure that MYFIs are ready to submit the information relating to the reportable jurisdictions within the timeline, MYFIs are advised to prepare the report of all participating jurisdictions and not only the reportable jurisdictions.

The initial List of Reportable Jurisdictions was  published on 15 January 2018. This list will be updated again on 30 June 2019, for reporting to IRBM in 2019. For 2020 reporting onwards, the list will be updated on 15 January and 31 May each year.

Taiwan updates information on CRS reporting

On 14 January 2019, the Taiwan Ministry of Finance published updated information on the reporting under the Common Reporting Standard (“CRS”) (Link-Chinese). The information includes a list with integrated links to relevant updated regulations. Furthermore the introduction to the implementation of CRS and the CRS profile has been updated (Link-Chinese).

In addition, on 28 December 2018, the Taiwanese government released official videos on CRS on their YouTube channel (Link-Chinese). More videos on AEOI are expected to be issued in the coming weeks.