March 2015: Common Reporting Standard is Coming in 2015

The market is gearing up to implement OECDs Common Reporting Standard (CRS) in 2015, whilst in parallel the regulators are creating the required regulatory framework to implement these rules in over 50 countries. With most of these jurisdictions reporting obligation coming into effect for the 2016 tax year, this means a very busy 2015, especially for those organisations that will have to implement these rules in multiple jurisdictions.

As experts in International Tax treaties, DBFS have provided a short status update so that organisations know what to expect in 2015. DBFS have also highlighted some areas worth taking into consideration when initiating an OECD CRS project.

One of the issues of the CRS regulation, and the Automated Exchange Of Information (AEOI) framework is that it is not a single regulation, instead it is a set of regulations which all interact. In most cases it is safe to use the term CRS to refer to the complete set of regulations but it is important to be aware that the regulation will differ between regions and jurisdictions.  For example, a UK Financial Institution will need to comply with the HMRC jurisdiction, which will be modelled on the “DAC” as an EU Jurisdiction; the “DAC” is in turn based on the CRS extended for EU cooperation. Due to this complexity we have added a section to this article outlining how these regulations interact.

Link: Download PDF version of this article

CRS is not just an extension of FATCA

OECD Automated Exchange Of Information (“AEOI”) and the Common Reporting Standard (“CRS”) build on previous regulations for sharing tax data, such as FATCA (US Foreign Accounts Tax Compliance Act) and the EU Saving Directive.

Whilst CRS builds on these, on the surface they seem quite similar and even have the same overall structure in the case of FATCA, it is important to note that CRS is different. When looking at the details it soon becomes apparent that for many Financial Institutions the wider scope of CRS will have far reaching impacts and make it challenging to implement as an extension. As an example, one client reported that they would have to review over twenty times as many accounts under CRS as they did under FATCA due to differences in de-minims rules (i.e. threshold).


OECDs Automated Exchange Of Information framework was accepted and CAA (Competent Authority Agreements) was signed between 51 jurisdictions, 47 signed as early adaptors with reporting obligation staring in 2016.


EU Directive 2014/107/EU was published, amending previous directive 2011/16/EU, making CRS part of EU law. It is this directive that will regulate Financial Institutions located in EU Jurisdictions (see DAC).

Q2 2015

HMRC to publish the regulation for CRS compliance for UK domiciled Financial Institutions.


First FATCA and ITC2014 (International Tax Compliance [Crown Dependencies and Gibraltar] Act 2015) report submission date for 2014.


Cut off date for Pre-existing accounts under CRS.


First reporting year for Financial Institutions located in Jurisdictions classed as Early Adaptors starts. (Including all EU members except Austria).

To see what jurisdictions have signed up, DBFS provides an interactive map, which will give you an overview of the global adaptation of OECD CRS. This can be found on:

Efficient data collection is the key

One of the key requirements for a successful CRS compliance project will be the creation of an efficient data collection strategy. The Financial Information to be reported includes interest, dividends, account balance, income from certain insurance products as well as sales proceeds from financial assets.

Furthermore, the project will need to set up a strategy for requesting, processing and storing the tax residency (not citizenship as in FATCA) for over 50 jurisdictions, and while part of this will be covered by

current AML and KYC processes, there will be additional steps required including documentation remediation.

When gathering this information, it is important to consider clients reaction as they will be receiving requests for additional information, in some cases from multiple Financial Institutions. It is worth noting that some of the information you request may not be available (certain jurisdictions do not provide Tax Identification Numbers for example) or a Financial Institution can not demand the information (Tax Identification Numbers is not always public data).

Structure of OECD CRS regulations

One of the challenges of OECD CRS is that it is a global regulation with local jurisdictional variances. As such, the structure of the regulation is quite complex. Below figure was added to help explain the overall structure of the framework.

OECD Exchange of Information or OECD Convention on Mutual Administrative Assistance in Tax Matters is a group of 85 countries that have signed up to international co-operation for a better operation of national tax laws, while respecting the fundamental rights of taxpayers.

 OECD Automated Exchange Of Information

The regulatory framework for automated exchange of information was requested by the G20 and created by the OECD. The aim of this framework is for jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. It sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions.

AEOI consists of two regulations or agreements, the CAA (Competent Authority Agreement) and CRS (Common Reporting Standard).

OECD Competent Authority Agreement

The Competent Authority Agreement (CAA) is the bilateral agreement between Jurisdictions that have signed up to the AEOI. The agreement is what allows for the Competent Authorities (in most cases the jurisdictions tax authority is the “Competent Authority”) to exchange information.

OECD Common Reporting Standard

The Common Reporting Standard sets out the baseline regulation to be adopted in the jurisdictions that have signed up to AEOI. It sets out who will be reporting, what will be reported and to some degree the format of the reporting. This could be seen as the minimal requirements for the regulations


DAC is the “common name” for Directive 2011/16/EU and 2014/107/EU, the EU regulations that sets the standard for how CRS will be implemented within the European Union. The DAC regulation meets all the requirements from CRS and further extends the EU Savings Directive. For any Financial Institution located in EU to be compliant, it is the DAC not the CRS regulation that they must comply with.

Clarification 17/03/15: defining ‘the DAC.’

  • The DAC stands for Directive on Administrative Cooperation, this is the full name of Directive 2011/16/EU. This is the initial regulation for “Enhanced administrative cooperation in the field of (direct) taxation”.
  • 2014/107/EU is the Directive which states that all EU member states will implement the CRS. I have heard this referred to as DAC 2, but have not found any “official” reference to it as such.

For clarity, in our article we use DAC to refer to EU’s work to extend CRS for EU reporting purposes, and make no distinction between the two directives as (for the purpose of the article) the distinction is only required for people involved with EU regulatory progress.



Due to the fact that tax matters are not subject to the EEA (European Economic Association) Agreement, the three EEA countries Norway, Iceland and Liechtenstein will not be required to transpose the revised DAC. However, the three EEA countries have joined the so-called Early Adopters Group and committed themselves to move to the OECD standard on Automatic Exchange of Information in 2017 with effect for the tax year 2016. There is currently negotiation between the EU Commission and these countries to create a bilateral agreement which is based on the DAC and will extend the CRS. This highlights an important aspect of the CRS, there could be other CRS extensions, for example a North American or a pan Asian version to increase regional cooperation which would further add to the complexity of implementing the regulation.


Further reading:

For further reading on CRS, please visit our GATCA portal on:

DBFS will be releasing additional articles on aspects of OECD CRS. These will be announced on the tax treaties section of our webpage, where you can also find additional information on FATCA and ITC2014:

If you wish to receive our articles as they are released, have any questions on the material, or wish to talk to one of our consultants, please email or call us on (0) +44 0207 332 0300.

Link: Download PDF version of this article

« back to all news