‘Common Reporting Standards’ (CRS) which was created by the ‘Organisation for Economic Cooperation and Development’ (OECD) relates to the automatic exchange of information from ‘Reportable Accounts’ between the jurisdictions which have signed up to the scheme. CRS was specifically put together to combat tax evasion. As such the information to be exchanged is pretty much everything that could be of interest to a tax authority keen to identify whether or not a person is committing tax evasion.
With regards to what is considered a ‘Reportable Account’ OECD don’t outline a specific criteria and instead leave it up to each jurisdiction to determine what qualifies as a ‘Reportable Account’. CRS was implemented within the EU on the 1st of January 2016 with the first exchange to take place in 2017. The ultimate implications of CRS are that there are no longer any places to hide and the sooner anyone attempting to avoid their tax obligations draws a line in the sand and becomes compliant, the better for them it will be.
CRS should be of particular interest to expats living in Spain that should have submitted a modelo 720 (the foreign asset declaration) but failed to do so for whatever reason. The idea that Hacienda aren’t efficient enough to discover assets held outside of Spain which should have been declared on a modelo 720 is no longer a valid perspective (if it ever was in the first place) given that now the information will simply be passed to Hacienda automatically.
Author Christopher Pickering.
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