The OECD has released the April 2017 version of its Frequently Asked Questions, which give detailed explanations on a variety of CRS topics. The following additional issues are addressed in the updated FAQ publication:
- Qualification of usufruct (a legal right to use and derive profit from property) for CRS purposes
- Identification of Controlling Persons of Passive NFEs with Financial Institutions in the chain of legal ownership
- Consequences of changing AML/KYC and due diligence procedures for CRS purposes
- Look-through requirement for widely-held Collective Investment Vehicles (CIV) and pension funds in the form of trusts in non-participating jurisdictions
- Application of the relationship manager inquiry when applying new account due diligence procedures to preexisting accounts
- Confirming the validity of self-certifications by reliance on other documentation
- Reliance on Model 1 FATCA IGA definition of “Investment Entity” for CRS purposes
- Qualification of electronic money providers as depository institutions
- Conditions for excluding low-value electronic money accounts
- Determination of equity interest in the case of a widely-held CIV that is a Reporting Financial Institution
- Application of the definition of “Financial Account” to debt and equity interests held in Investment Entities
- Clarification of the definition of “Active NFE” in relation to stocks regularly traded on an established securities market
Additionally, the OECD has updated the CRS informational webpage – adding a section called “Maintaining the integrity of CRS” which allows users to share information with the OECD on potential CRS avoidance schemes. It has also published information regarding intelligence gathering, analysis of actual or perceived loopholes, and appropriate courses of action to address such gaps.
The OECD has tallied over 1,800 bilateral CRS automatic exchange relationships to date. It has also updated its International Framework for the CRS information page accordingly, which gives further information regarding the operation of the Multilateral Competent Authority Agreement (MCAA). Turkey recently signed the MCAA, becoming the latest country to commit to CRS in 2018. Kuwait also recently took an initial step to improve tax transparency by signing on to the Convention on Mutual Administrative Assistance in Tax Matters. This Convention provides the foundation for Kuwait to enter into bilateral negotiations and agreements with other member countries.
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