advice
business / SOFTWARE DEVELOPERS / advice / UNCLASSIFIED
Segment / audience / Format / Classification
CHANGE Advice
Reference No: / 2018 - 020
Title: / Common Reporting Standard (CRS)
Version No: / 1.01
Document Date: / 21/07/2017
CHANGE IMPLEMENTATION DATE / 01/07/2017
TAX MEASURE COMMENCEMENT DATE / 01/07/2017
CURRENT STAGE / CONCEPTUAL
HIGH LEVELDESIGN
REQUIREMENTS ANALYSIS
DETAILED DESIGN
LIKELIHOOD / DRAFT
LIKELY
DEFINITE
Channels affectedExternal Tax Software products affected
ELS Fringe Benefits Tax (FBT)
SBR Resource Rent Tax (RRT)
ECI Income tax
eSAT Business Accounting systems
Portal Superannuation Systems
Prefill data Payroll systems
Calculators Corporate enterprise systems ( e.g. finance/ HR)
Paper Forms
Outbound Correspondence
IMPORTANT. Information in this advice is draft only and subject to change. It is provided under the terms and conditions of the ATO Software Developers Homepage( ) and noted in the footer below
DEPENDANT LEGISLATION
Tax and Superannuation Laws Amendment (2015 Measures No. 6) Bill 2015: Common Reporting Standard
BACKGROUND INFORMATION/POLICY INTENT
Tax evasion is a global problem and international cooperation and sharing of high quality, predictable information between revenue authorities will help them enforce compliance with local tax laws. The CRS is an international framework developed by the Organisation for Economic Co operation and Development (OECD), working with G20 countries to tackle and deter cross-border tax evasion. It establishes a common international standard for financial institutions to identify the financial accounts of foreign residents, report information on those account holders and their financial accounts to their local tax authority and for the authority to exchange that information with the tax authority of the foreign resident.
The Common Reporting Standard (CRS) was formally referred to as the Standard for Automatic Exchange of Financial Account Information. The legal basis for the exchange of data is the Convention on Mutual Administrative Assistance in Tax Matters. The concept is based on the USA Foreign Account Tax Compliance Act (FATCA) implementation agreements.
The CRS represents a single global standard for the collection, reporting and exchange of financial account information on foreign tax residents. Under it, a Reporting Financial Institution (RFI) reviews its financial accounts by applying the CRS’ due diligence rules to identify accounts held by residents in other jurisdictions, and then reports the relevant information to the local tax authority. The information is then sent to the foreign tax residents’ home tax authority.
On 22nd and 23rd February 2014 the CRS for the automatic exchange of information was endorsed by G20 Central Bank Governors and Finance Ministers. In September 2014, the Government announced that the CRS would be implemented in Australia from 1 January 2017, and the first exchange of information would take place in 2018. Treasury has now recommended that CRS implementation be brought forward to 1 July 2017.
Financial institutions required to report under the CRS include banks and other deposit taking institutions, custodial institutions, investment entities, and insurance companies that issue or make payments to investment linked life insurance or annuity contracts. These reports will be transferred between participating jurisdictions on a calendar year basis via bulk data exchange. Australian RFIs will be required to use an approved form.
BUSINESS REQUIREMENTS SUMMARY
Create a solution for RFIs to electronically report their data to the ATO, and for the ATO to manage CRS data, including:
- Electronic lodgement.
- Take-on, storage, organisation and use of CRS data.
- Registration/tracking of the CRS domestic reporting obligation (i.e. upon lodgment/timeliness).
- Incorporate Foreign Account Tax Compliance Act (FATCA) in the delivery of this requirement.
CONCEPTUAL VIEW (High Level Design)
N/A
DETAILED DESIGN
N/A
Names of Forms impacted:
Common Reporting Standard (CRS)
UNCLASSIFIED / This A controlled information resource WHICH is information that is not yet available to the general public, IT is made available to software developers for the sole purpose of assisting in the development of tax-related software (both commercial and in-house).
In some cases the information is in draft form or has been made available for the purposes of consultation, proof of concept work and or pilots.
HOLDERS OF THIS DOCUMENT should not on-forward controlled information to persons or organisations outside THEIR own organisation OR FOR OTHER PURPOSES. See / PAGE
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