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CRS stands for the Common Reporting Standard (CRS). CRS was developed by the Organisation for Economic Co-Operation and Development (OECD) and endorsed by the G20 Finance Ministers as the global standard for the automatic exchange of financial account information to better fight tax evasion and improve tax compliance.
Over 100 countries have implemented CRS. Canada implemented CRS on July 1, 2017.
As with other financial institutions, RBC businesses operating in jurisdictions that have implemented CRS are required to comply with local legislation.
CRS Fundamentals
CRS provides standard procedures to be followed by financial institutions to identify and report annually to their local tax authorities certain accounts (Reportable Accounts) held by tax residents of Reportable Jurisdictions, or accounts for certain entities in which such persons have an interest. Local tax authorities will, in turn, forward the information to the relevant Reportable Jurisdictions with which they have Competent Authority Agreements (CAAs) and accordingly have an obligation to exchange information.
What is a Reportable Account?
For CRS purposes, the following are considered Reportable Accounts:
- Accounts for individuals and entities identified as tax resident in one or more Reportable Jurisdictions. (There are exceptions for certain types of entities, such as publicly-traded corporations, governments, international organizations, central banks and financial institutions.)
- Accounts for entities that are Passive Non-Financial Entities with Controlling Persons that are identified as being resident in a Reportable Jurisdiction.
CRS Requirements:
CRS applies to all types of financial accounts, including insurance, investments, and business accounts.
In Participating Jurisdictions, Reporting Financial Institutions (RFIs) comply with local legislation to identify and report information about Reportable Accounts to their local tax authority on an annual basis. In turn, the local tax authority will exchange information with other Reportable Jurisdictions with whom they have entered into a CAA and therefore have an obligation to provide information.
For identification purposes, new clients are required to complete a self-certification form in which they indicate their residence(s) for tax purposes. Entity clients are also required to indicate their CRS status on the self-certification form, and in some cases, provide information and self-certifications regarding the entity’s Controlling Persons. These self-certifications are kept on file at RBC.
Client information to be reported generally includes name, address, jurisdiction(s) of tax residence and related taxpayer identification number(s) (if any), date and, in some circumstances, place of birth (for individuals), year-end account balance or value, income paid or credited to the account, and gross proceeds from the sale or redemption of financial assets paid or credited to the account.
Governments will only share relevant client information with those jurisdictions with which they have entered into a CAA.
Safeguarding client information is a cornerstone of our business. RBC will only report account information to local tax authorities where required by law.
RBC's Approach
RBC understands the objectives of the Common Reporting Standard (CRS) and global concerns about tax evasion, and complies with domestic laws in the countries in which we operate.
RBC is committed to minimizing the impact of CRS on client service and continuing to make it easy for clients to do business with us.
RBC works closely with industry associations, governments and regulators on an ongoing basis to share best practices and ensure compliance to CRS requirements.
CRS was developed by the Organisation for Economic Co-Operation and Development (OECD) and endorsed by the G20 Finance Ministers as the global standard for the automatic exchange of financial account information to better fight tax evasion and improve tax compliance.
The first step in CRS is the collection of the information to identify Reportable Accounts. Financial institutions are required by law to identify accounts for individuals and entities that should be reported, and then securely report the required information to the local tax authority. Once the local tax authority has received the information from a financial institution, it will then exchange the information with the tax authority of the jurisdiction in which the individual or entity is tax resident. The local tax authority will only exchange information with jurisdictions with a Competent Authority Agreement (CAA) in place.
As with FATCA, CRS is an effort to stem tax evasion. However, the scope of FATCA is limited to the identification and reporting of U.S. taxpayers.
CRS is an international standard with reporting based on tax residency in Reportable Jurisdictions.
Financial institutions that request information solely for the purposes of CRS are not permitted to use the information for any other purpose. The information will be provided to the local tax authority in accordance with the relevant local legislation. Information exchanged between jurisdictions is subject to confidentiality rules and exchanging jurisdictions must also ensure the protection of personal data. If you have concerns about the confidentiality of your personal information, contact your local tax authority. If you have received any correspondence regarding CRS from RBC and have any questions or concerns please use the contact information provided to you to speak with us.
As RBC is legally obliged to collect certain information for CRS purposes to identify Reportable Accounts and report such accounts to their local tax authorities, account holders should complete self-certifications and provide other documentation or information when requested to allow RBC to report accurately.
Yes. Generally, an individual will only have one jurisdiction of residence. However, an individual may be resident for tax purposes in two or more jurisdictions. The domestic laws of the various jurisdictions define the conditions under which an individual is to be treated as resident for tax purposes.
RBC employees are not able to provide legal or regulatory advice as it pertains to CRS or any other tax matters. It is the responsibility of the account holder to determine their tax residence(s).
Participating Jurisdictions have provided (or will provide) to the OECD an overview of tax residency rules applicable in their jurisdictions. These jurisdiction-specific overviews can be found on the OECD Automatic Exchange Portal (opens to external site).
Clients should check with their local tax authority (or authorities) or speak with their tax advisor if they are unsure of their tax residence(s).
Certain cash value insurance contracts and annuity contracts are subject to CRS.
Financial institutions in jurisdictions that have committed to implementing CRS are legally obliged to comply with CRS procedures to identify and report Reportable Accounts to their local tax authority.
For more information about CRS, please visit the OECD website (opens to external site).