The Common Reporting Standard (CRS), formally referred to as the Standard for Automatic Exchange of Financial Account Information, is an information standard for the automatic exchange of information (AEOI), developed in the context of the OECD. The legal basis for exchange of data is the Convention on Mutual Administrative Assistance in Tax Matters and the idea is based on the USA Foreign Account Tax Compliance Act implementation agreements.
BVI FSC has confirmed that it will delay implementation of the Common Reporting Standard (CRS) in the BVI.
On 1 January 2016 legislation to implement the CRS rules came into effect. The BVI tax authority has now clarified that Financial Institutions (FIs) will be required to notify that they will have reporting obligations for the 2016 reporting year by 30 April 2017, rather than 30 April 2016 as previously stated. Reporting FIs will then be required to make their returns by 31 May 2017, as previously advised.
The welcome adjustment will provide FIs with more time to put the necessary compliance processes in place. The method of notification will be confirmed by the BVI tax authority by the end of 2016 Given the extent of planning required we welcome the delay in the implementation of CRS. It also gives the BVI time to see how the implementation is being phased in elsewhere.
The overall process for identifying reportable entities and reportable customers under the CRS is similar to the FATCA Model 1 IGA, but there are some key differences, including that the CRS is based on tax residency rather than citizenship.