Over the last few years, a number of initiatives have been undertaken to improve global cross border tax compliance, which led to the development of various reporting regimes relating to the exchange of taxpayer information. Such initiatives include the Foreign Account Tax Compliance Act (‘‘FATCA’’), which focuses on the reporting of financial account information with respect to U.S. taxpayers, and the OECD Common Reporting Standard (“CRS”), a global standard for the automatic exchange of financial account information.
The exchange of taxpayer information under FATCA and CRS is effectively achieved through the imposition of obligations on Financial Institutions – such as banks, custodians, asset managers, certain types of funds and insurance companies – to collect, review and report information about their account holders/investors. Such information will eventually be reported to the tax authorities of the country(ies) of tax residence of each account holder/investor.
An entity’s status under FATCA and CRS will determine relevant compliance obligations and reporting implications for such entity:
An entity needs to identify whether it falls under the definition of a Financial Institution for FATCA and CRS purposes, as Financial Institutions are required to comply with various due diligence, reporting and other compliance obligations arising from FATCA and CRS as well as local legislation.
Any entity may be requested by Financial Institutions with which it engages, to provide them with completed self-certification forms, which typically require declaration of the entity’s country(ies) of residence for tax purposes, status under FATCA and CRS, and in certain cases information with respect to the entity’s controlling persons. This will determine whether the entity’s account is considered reportable for FATCA and/or CRS purposes.
PwC Cyprus has a dedicated team of local experts with international experience in the implementation of FATCA and CRS, who work closely with our global network of specialists to provide you with tailored advice and support on the technical and operational consequences of FATCA and CRS. We can provide you with an efficient and effective solution in all aspects of FATCA and CRS, including:
Assistance with an initial entity analysis in order to determine the classification of an entity and identify the relevant implications arising from such classification.
Assistance with the completion of FATCA and CRS self-certification forms.
For entities classified as Financial Institutions (such as banks, funds, asset managers and insurance companies) – provision of operational support with respect to the implementation of the various FATCA and CRS obligations, such as account due diligence and reporting, drafting of business requirements documents etc., as well as provision of training to personnel on the FATCA and CRS requirements.
Understanding of the detailed regulatory requirements under FATCA and CRS and their impact in the context of your specific business needs.