Jurisdictions agree to exchange information on digital platforms and CRS avoidance
The CRS is an international standard under which OECD countries collect information on holders of accounts at their domestic banks and other financial institutions and then pass it to the authorities of other countries for use in tax enforcement. Soon after it was introduced in 2016, it became clear that schemes for circumventing it were being devised and as a result the OECD developed a disclosure methodology under which taxpayers and intermediaries could be required to report such schemes, so that they could be analysed and appropriate counters developed. The mandatory disclosure rules have subsequently been extended to cover new financial products such as crypto-assets, but have not been widely implemented by participants in the CRS system.
The 16 signatories to the new multilateral competent authority agreement have now agreed to adopt the OECD mandatory reporting scheme in their dealings with each another. Each jurisdiction will collect information from intermediaries that have identified arrangements to circumvent the CRS and structures that disguise the beneficial owners of assets held offshore. Every year, the jurisdictions will pass that information automatically to the taxpayers' jurisdictions of tax residence.
The signatories are Bermuda, Belgium, the Cayman Islands, Colombia, Costa Rica, Cyprus, Guernsey, Finland, Iceland, Isle of Man, Jersey, Portugal, Slovenia, South Africa, Spain and the UK.
Separately, 22 jurisdictions have signed a multilateral competent authority agreement for the automatic exchange of information under the OECD's model rules for reporting by digital platforms. The agreement will allow them to automatically exchange information collected by operators of digital platforms about transactions, income and sales of goods realised by platforms in the sharing and gig economy.
The signatories to this agreement are Argentina, Belgium, Bulgaria, Canada, Colombia, Costa Rica, Cyprus, Estonia, Finland, Iceland, Ireland, Latvia, Luxembourg, Malta, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain and the UK.
These jurisdictions will exchange information collected by operators of digital platforms with respect to transactions and income realised by platform sellers in the online economy and from the sale of goods through such platforms.
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