CRS & FATCA for tax transparency
Govenrments worldwide, within the context of combating tax evasion, improving tax transparency and protecting the reliability of the tax system, require financial institutions to collect tax information from their clients and report this information to relevant tax authorities of each country.
The Foreign Accounts Tax Compliance Act, known as the FATCA, was imposed by the USA and came into force in July 2014. Its aim is to detect, deter and discourage offshore tax evasion by U.S. citizens or residents, who either directly or indirectly, invest outside the USA through foreign financial institutions.
Several countries, including Cyprus, signed an Intergovernmental Agreement with the USA (IGA), in order to facilitate the implementation of FATCA provisions by financial institutions in their jurisdictions.
The Common Reporting Standard, known as the CRS, was promoted by the Organization for Economic Co-operation and Development (OECD) as an additional international initiative based on the development of a single global standard for the automatic exchange of information between tax authorities.
Since December 2015, 102 countries, including Cyprus, have adopted the CRS, with the number of participating countries constantly increasing. A full list of the committed participating jurisdictions can be found at the link http://www.oecd.org/tax/transparency/AEOI-commitments.pdf).
Cyprus Government, as well as another 49 jurisdictions, have agreed to early adoption of the CRS and undertake the necessary CRS obligations from 1st January 2016 (the first exchange of information took place in 2017).
How this will affect you
With the adoption of FATCA and CRS by the Republic of Cyprus, all local financial institutions, including Bank of Cyprus (BOC), need to comply with the regulatory requirements. Therefore, the Bank communicates with its clients for collection of the relevant tax information, including their country of tax residence and tax identification number. This information is collected on the relevant self-certification form.
Accounts held by BOC that fall within the scope of a Reportable Account under FATCA and CRS, are subject to reporting on an annual basis.
Our commitment to you
BOC is committed to comply with the relevant regulatory framework and collect relevant information with a minimum burden on its customers.
Further information in relation to FATCA and CRS can be found on the websites of:
The Cyprus Tax Department at http://www.mof.gov.cy/mof/tax/taxdep.nsf/page20_gr/page20_gr?opendocument
The Association of Cyprus Banks at www.acb.com.cy
BOC is unable to comment on an account holder’s tax position and you may need to consider professional advice if you are unsure of your personal tax circumstances.