By Citi Private Bank,
June 20, 2018Posted InCiti
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Incomplete, invalid, or missing documents could lead to banks having to report client's financials to additional jurisdictions.
Clients that have accounts outside of their home country with any bank need to be aware of – and comply with – new international tax reporting rules that are now in effect. This includes completing a Common Reporting Standard (CRS) Tax Certification form – “CRS Self-Cert form”. Banks then have an obligation to validate the information provided.
In cases where forms are determined to be invalid, incomplete, or missing entirely, banks have an obligation to report clients’ financial information to the local tax authorities in the country where the account is held. The reportable financial information for clients with missing or invalid forms includes all indications of a clients’ potential tax residencies based on the bank’s records.
To see what this might mean in practice, suppose there is a client who is a resident in Singapore and who has an account with a bank in Hong Kong. The same client also has a UK mobile phone number registered with the bank as the same client lived in the UK several years ago. The client has no ongoing interests in or exposure to the UK. As the client has also not completed the CRS Self-Cert form, the bank is obliged to report to the Hong Kong authorities that the client has Singapore and UK tax residencies.
As a reminder, this new reporting requirement is part of the global industry implementation of the Common Reporting Standard (CRS), which we reported on last year. Citi's CRS Self-Cert forms can be downloaded here.