As the year 2015 comes to an end, Luxembourg and the EU draws closer to the implementation of OECD's Common Reporting Standard (CRS) for the automatic exchange of information, to apply as of 1 January 2016.
The Luxembourg CRS draft bill was published on 14 August 2015, based on Directive 2014/107/EU and constituing the legal basis for the implementation of CRS-based automatic exchange of information with all other EU Member States.
The CRS constitutes a single global standard for the automatic exchange of tax information, subsequently obliging financial institutions to collect financial account information on account holders who are subject to tax accountability in another CRS partner jurisdiction, and to report this information to the financial institution's local tax authorities. These authorities then exchange the information with the relevant partner jurisdictions' tax authorities on an annual basis.
More than 90 jurisdictions will participate in the initiative, with the EU having reacher agreement with Switzerland to apply CRS based information exchange from 2017. Additional laws will follow for the jurisdictions concerned, to ratify and transpose bilateral or multilateral agreements with other CRS partner jurisdictions in the new future.
In order to help market players prepare for this global tax transparency initiative, the audit, condulting advisory and consulting company Deloitte Luxembourg will be organising a series of events and workshops in the end months of 2015.
"Luxembourg market players need to act now to ensure compliance with CRS obligations from January onwards," explained Pascal Eber, Partner, Advisroy & Consulting at Deloitte Luxembourg. "Our recommendation to these entities is to capitalise as much as possible on efforts carried out in relation to the implementation of FATCA and adapt to the specific reporting obligations by CRS. As the reporting volume is likely to grow exponentially, market players will need to decide whether they will develop their internal IT systems, whether external packages will be integrated, or whether outsourcing of reporting should be considered".
He concluded: "Market players really need to act today to achieve CRS readiness on 1 January 2016".
Deloitte Luxembourg have established a website specificall for CRS and FATCA information, which can be found at http://www2.deloitte.com/lu/crs.
Photo by Deloitte Luxembourg (Pascal Eber)
