CRS Profile

Common Reporting Standard Brochure CRS E-Learning cum Consultancy Website crsconsultancy.com

Welcome to CRS Brochure Which Provides a Complete Solution for Common Reporting Standard In 2014, the OECD together with G20 countries and in close cooperation with the EU as well as other stakeholders developed the standard for Automatic Exchange of Financial Account Information in Tax Matters, or the Standard. This was in response to the call of the G20 leaders on international community to facilitate cross-border tax transparency on financial accounts held abroad. The Standard intends to equip tax authorities with an effective tool to tackle offshore tax evasion by providing a greater level of information on their residents’ wealth held abroad. In order to maximize efficiency and minimize costs the standard builds on the automated and standardised solutions that jurisdictions previously developed for the purposes of the intergovernmental operationalisation of the US laws commonly known as FATCA.

What’s Inside For Real Time the Portal E-Due Diligence Understanding Procedures CRS CRS in Please Visit Our Website Pakistan The Model crsconsultancy.com CAA Financial Regular Updates on Institution Financial OECD Accounts Excluded Requirements Accounts Reporting Requirements General Due Diligence Requirements Special Due Diligence Rules Due Diligence - Individual Accounts Due Diligence - Entity Accounts Participation Jurisdiction Wider Approch

Understanding CRS Common Reporting More on Standard CRS Website Off-shore tax evasion is an issue as vast amounts of General Due Diligence money are kept off-shore and are therefore untaxed. Requirements Therefore, The Organization for Economic Cooperation and Development (OECD) together with G20 countries Due Diligence of and other stakeholders developed the Standard for Individual Accounts Automatic Exchange of Financial (AEoFI) Account Information to provide tax authorities with greater Due Diligence of information on their resident’s wealth held abroad. CRS Entity Accounts is based on the automated system that is similar to what Special Due Diligence jurisdictions previously developed for the purposes of the intergovernmental operationalization of the US laws Rules commonly known as FATCA. While FATCA revolves around the issue of citizenship, CRS has a different approach which is using the concept of residency instead where citizenship doesn’t play much of a role. Financial Institutions have to share information with their local tax authorities pertaining to their account holders that also identifies their residency statusand this information is exchanged with tax authorities with whom Pakistan or anything other country in question has signed a bilateral agreement. Globally, the first exchange took in September 2017. Over 100 jurisdictions are participating in automatic exchange of information 2018. crsconsultancy.com

CRS in Pakistan The Federal Board of Revenue (FBR) by Notification Find S.R.O. 166(I)/2017 dated March, 15, 2017 adopted CRS Jurisdiction as developed by the OECD made applicable in Pakistan Participating from July, 2017 with first exchange of information with Pakistan which took place in 2018. Under the CRS, the Financial Institutions of Pakistan are under obligation to identity on our their non-resident account holders, by due diligence website procedures prescribed by OECD, who have tax residents in countries other than Pakistan and USA After crsconsultancy.com identifying such account holders. The Financial Institutions have to submit report to the FBR containing Excluded details of requisite information of such account holders Account that will be exchanged by the FBR to participant countries [with whom Pakistan has entered into agreements for automatic exchange of information (AEOI)] where such account holders have tax residents. The FBR has adopted wider approach regarding due diligence of non-resident account holders having tax residence in those countries with whom Pakistan has not yet entered into agreement for automatic exchange of information. It will be cost effective as the financial institutions will not have to re-undertake exercise of due diligence of their account holders as and when Pakistan will enter into agreement of automatic exchange of information such countries. General Specific crsconsultancy.com

The Model CAA The Model of Competent Authority Agreement (The Model CAA) Links CRS and the legal basis for the exchange (e.g convention or the bilateral tax treaty) allowing the financial account information to be exchanged. It contains clauses on domestic reporting and DD rules to be followed and also contains representations on confidentiality, safeguards and existence of the necessary infrastructure for an effective exchange relationship. It contains sections on definitions, type of info to be exchanged, the time and manner of exchange. Terms, suspension and termination of the agreement are also included. Time and Manner of Exchange of Information The amount and characterization of payments made with respect to a reportable account may be determined in accordance with the tax laws of the jurisdiction sharing the information. The information exchanged will identify the currency in which each relevant amount is denominated. Information will be exchanged within nine months after the end of the calendar year to which the information relates. However, both the jurisdictions have legislation that required info to be exchanged with respect to a calendar year and the CRS DD procedures are followed. The competent authorities will automatically exchange the info In a CRS schema and will agree to one or more methods for data transmission including encryption standards. Confidentiality and Data Safeguards Each Competent Authority will notify the other Competent Authority immediately regarding any breach of confidentiality or failure of safeguards and any remedial actions consequently imposed. crsconsultancy.com

Term of Agreement The agreement will come into effect when notifications are provided by each Competent Authority that its jurisdiction has the necessary laws in place to implement the agreement. In case of non-compliance by the other Competent Authority, exchange of information under this agreement could be suspended by giving notice in writing. Here non-com- pliance includes breach of confidentiality and safeguards, failure by Competent Authority to provide timely or adequate information as required under this agreement or defining the status of entities or accounts as Non-Reporting Financial Institutions and Excluded Accounts in a manner that goes against the purpose of CRS. Either Competent Authority may terminate this Agreement by giving notice of termination in writing to the other Competent Authority. Such termination will become effective on the first day of the month following the expiration of a period 12 months after the date of the notice of termination. In event of termination, all the information previously received under this agreement will remain confidential and subject to the terms of the convention. crsconsultancy.com

Reporting Financial Institution Reporting Financial Reporting Financial Insitutions by Definition Institution by Description Custodial Bank Institution Micro Finance Depository Equity & Bank Modaraba Institution Debt Trusts Brokerage Investment Mutual Interest Funds House Entity Investment Leasing Specified Advisor/ Company Insurance Manager Company Non-Reporting Financial Institution Custodial Lending Non-Banking Execution-Only Institution Financial Companies Broker By Virtue of (NBFCs) National Clearing Activity Company of Pakistan Non-Bank Micro List of Non Finance Companies Limited (NCCPL) Reporting Development Finance Financial Fund Management NBFCs: Real Institution Estate Investment Trusts (REITs) Institutions (DFIs) is availabe on CRS website Management Companies Exchange Companies (ECs) Read Complete Central Depository Details on Company (CDC) CRS Website crsconsultancy.com

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