Common Reporting Standard Becomes Effective
On 1 January 2016, the Common Reporting Standard (CRS) became effective. The CRS is a new, single global standard on automatic exchange of information. It replaces the EU Taxation on Savings Directive and is essentially a global form of FATCA-like reporting.
Under the CRS, Irish funds are now required to report certain information in relation to investors to the Irish Revenue Commissioners, who will in turn report this information to the tax authorities in other CRS participating countries. There is a distinction within the CRS regime between “New accounts” (i.e. accounts opened from 1 January 2016) and “Pre-existing accounts”. For New accounts investors will generally be required to provide additional information for funds to determine where they are tax resident. For accounts opened prior to this date, funds will generally be allowed to rely on the information they hold on file.
Funds should ensure that the investor subscription process is updated to obtain the required Self-Certification Form from investors and that all new investor applications contain a “Data Protection Customer Information Notice”. Irish Funds, the representative body of the Irish funds industry, has published a self-certification form for use in respect of new investors.
In addition the Data Protection Commissioner has set out some requirements that funds should be aware of. In order to make the reporting by Irish funds easier, the Data Protection Commissioner has agreed that funds can report details in relation to all investors (including those from jurisdictions currently outside the scope of CRS, should they wish) and the Revenue Commissioners will then only report data in respect of those investors from countries within the scope of CRS.
This approach will remove the requirement for funds to categorise investors from different jurisdictions. Where this approach is adopted the Data Protection Commissioner requires all new investor applications (effective from 1 January 2016) to contain “appropriate data protection customer information notices”. These Customer Information Notices must include the following information:
- Why the data is being collected
- What will be done with the data
- What information will be reported to Revenue and inform that Revenue may exchange information with other Tax Authorities
- It should also outline where the customer can obtain further information, namely the AEOI (Automatic Exchange of Information) webpage on Revenue.ie will contain more information in this regard.
