Until the end of August 2018, there are already 149 countries and regions promise that they would achieve the first automatic exchange of tax-related information in a financial account by September 2018.
CRS, Common Reporting Standard, is an automatic exchange standard of tax-related information in financial account around the globe.
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The signing and implement of CRS mean that the financial asset information of individuals will be automatically exchanged among the tax authorities of participating countries (regions), and finally provide information support for the supervision of cross-border tax sources of countries (regions).
Nationality=Tax Resident?
Simply, under CRS, the rateability of an account holder isn’t defined by the nationality you have, but it is defined by where you are a tax resident and decide what kind of rateability should you shoulder.
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For example, Miss Wang(English Nationality), work and live in the UK, under the condition of regarding her as a UK’s tax resident, the information in her local financial accounts will not be published to the Chinese tax authority.
However, of Miss Wang also has a financial account in China, the relevant information will be delivered to the English government from Chinese tax authority.
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Foreigners, overseas nationals and compatriots from Hong Kong, Macao, and Taiwan who reside in China and stay here within a certain tax year for a specific number of days will also be regarded as Chinese tax residents.
All CRS participating countries
will conduct CRS information exchange?
Not all CRS participating countries can exchange account information with each other, based on a certain regulation and relevant laws, an additional “activation” procedure is also required.
Countries need to list partner countries in the “willingness to exchange lists of countries” and match each other to activate, in order to exchange account information under CRS.
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For example, A takes B as a partner country, but B doesn’t A as a partner country, so they can’t exchange account information although both of them are CRS participating country.
And if B takes A as a partner country, both of them can exchange it.
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Accurately judge your tax resident identity. Holding a passport and permanent residency is not the same as being or merely being a tax resident of this country.
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Comb the relevant overseas financial account in detailed. If you want to seek professional advice, please contact the professional counselor in HACOS.
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Comprehensively assess tax risks in relevant overseas assets. High net-worth clients should inspect and improve their own tax administration whether to meet the regulation as soon as possible.