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Common Reporting Standard (“CRS”)
 

As from 1 January 2016, Industrial and Commercial Bank of China Ltd., Luxembourg Branch, as well as ICBC (Europe) S.A. (each hereafter referred to as “Bank”) need to be ready to apply the Common Reporting Standard and start collecting data for CRS reporting.

Context

Council Directive 2014/107/EU dated 9 December 2014 amending Directive 2011/16/EU as regards mandatory exchange of information in the field of taxation will apply as from 1 January 2016, and EU Member States should transpose this Directive before the end of 2015 into national law.

As from 1 January 2016, banks in Luxembourg will be legally obliged to report to the local tax authorities nominative and financial information (account balance and financial income) regarding clients who are tax resident in CRS participating jurisdictions. Local tax authorities will subsequently transmit this information to the countries of tax residency of the clients.

One of the banks’ obligations will be to perform an annual CRS reporting and the first CRS reporting will take place on 30 June 2017 (on 2016 situation).

At this stage, more than 100 jurisdictions participate in this OECD Multilateral Convention, or announced to participate in this Convention and its Protocol and signed or committed to sign the Multilateral Competent Authority Agreement. It is expected that additional multilateral and/or bilateral conventions will be concluded between a growing number of jurisdictions in order to impose similar automatic exchange of information obligations in the field of taxation, in the relation between the EU and certain non-EU jurisdictions, and/or between certain Member States of the EU and certain non-EU jurisdictions.?In this respect, China confirmed also its commitment to implement the Common Reporting Standard as from 2017.

Impact for our Clients

The Bank is required to collect, for new and pre-existing Clients, relevant information in order to confirm their tax residency:
-- For new account Clients, the Bank is required to obtain a self-certification including the name, address, tax residency, tax identification number and place and date of birth for individuals of the Client upon account opening; and
-- For pre-existing accounts Clients, the Bank may also require additional documentation such as a self-certification in order to confirm the tax residency.

The Bank will not enter into a new business relationship without having received a valid self-certification as from 1 January 2016.

The Bank cannot provide assistance to its clients in establishing the required self-certification forms and encourages them to seek guidance from their own tax advisor.

Additional public information on CRS can be found on the OECD website: http://www.oecd.org/tax/automatic-exchange/common-reporting-standard/.
The list of jurisdictions that have signed a Multilateral Competent Authority Agreement is available here: http://www.oecd.org/tax/exchange-of-tax-information/MCAA-Signatories.pdf


(2015-12-24)
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