Common Reporting Standard (CRS) has been saved
Article
Common Reporting Standard (CRS)
List of participating jurisdictions for Common Reporting Standard purposes updated effective from 31 March 2023
The list of participating jurisdictions was updated with effect from 31 March 2023. In this latest update, Kenya, Morocco and Trinidad and Tobago have been removed from the list of participating jurisdictions. The list of participating jurisdictions is relevant to the extent that a professionally managed investment entity not resident in a participating jurisdiction will be treated as a passive nonfinancial entity rather than a financial entity for due diligence and reporting purposes.
The Inland Revenue Authority of Singapore (IRAS) has informed that following the removal, a Change in Circumstances (CIC) would be triggered for Entity Account Holders that are Investment Entities where their tax residency is in such jurisdictions. As such, Reporting Singapore Financial Institutions cannot rely on the original self-certification and must obtain a new valid self-certification with details of the Controlling Person(s).
CRS Audits
Beginning from the last quarter of 2022, the IRAS has been observed to increase their CRS audit and query activities. The heightened scrutiny spanned from a variety of players within the financial services industry, from major banks to investment managers to smaller scale trustee/fiduciary service providers. The scope and depth of the queries also differed substantially, from the receipt of standard emails requesting for businesses to actively assess or re-assess their registration status to full blown on-site in-depth audits on general processes and account specific matters. Audits conducted by the IRAS were observed to be nuanced, comparing inconsistencies between year-on-year filings as well as comparing against apparent inconsistencies with Foreign Account Tax Compliance Act (FATCA) registrations or filings on an account-by-account basis.
It is not expected for such audits to taper soon given that Singapore will be undergoing the Organisation for Economic Co-operation and Development (OECD) peer review this year and financial services players should be prepared to allocate resources for such audits.
For further information, please contact Michael Velten.
