The STEP Policy Points have been created to inform members of relevant policy issues and the action STEP is taking on them.
Each document contains a brief background on the issue itself, details about how STEP has responded and information about other key stakeholders.
To ensure accuracy the series is checked and updated regularly, in line with any pertinent developments.
At present the Policy Points Series consists of:
- The Fifth Anti-Money Laundering Directive
- The Financial Action Task Force
- OECD Mandatory Disclosure Rules
- The Common Reporting Standard
- The Foreign Account Tax Compliance Act
If you know of an issue which you think may benefit from having its own Policy Point please let STEP know via: [email protected]
Fifth Anti-Money Laundering Directive
The legislation updates the EU’s approach to anti-money laundering. After the European Parliament and the European Council formally approved the text of the Directive it was published in the Official Journal of the European Union on 19 June 2018 and entered into force 20 days afterwards. Member States were then given an 18 month period to transpose it into their national legislation by January 2020.
Although the Directive covers a wide range of issues, such as the use of cryptocurrencies, the status of Politically Exposed Persons (PEPs) and enhanced rules for dealing with countries deemed to be ‘high risk’ there are a number of provisions which will impact the work of STEP members.
To read more about the relevant parts of the legislation please access our Policy Point (PDF 261KB)
EU Legislation on Reportable Cross Border Arrangements
Following the BEPs Action 12 Report the EU amended its Directive on Administrative Cooperation in the Field of Taxation (DAC).
The new rules focus on the role of intermediaries in designing or promoting tax planning schemes that are deemed aggressive. The legislation will require those involved in these activities to make reports to the relevant national governments. Any reports made will be automatically exchanged between Member States.
The deadline for the Directive’s transposition into national law was set at 31 December 2019 and the first exchanges took place from 1 July 2020, with the first exchange completions on the 31 October 2020. From this point, Member States are obliged to exchange information every three months.
To find out more about this issue please access our Policy Point (PDF 174KB)
The Financial Action Task Force
The Financial Action Task Force
STEP engages with the Financial Action Task Force on a number of issues.
This Policy Point outlines the work STEP has done on the following two topics:
- The UK’s first evaluation under the FATF’s mutual evaluation system.
- The production of FATF’s risk based approach (RBA) for professional intermediaries.
To find out more about these issues and STEP’s work on them please access our Policy Point (PDF 170KB)
OECD Mandatory Disclosure Rules
The OECD Mandatory Disclosure Rules
The OECD issued new model disclosure rules in 2018.
The rules require intermediaries to inform tax authorities of any schemes they put in place for their clients to avoid reporting under the OECD/G20 Common Reporting Standard (CRS) or prevent the identification of the beneficial owners of entities or trusts.
To find out more about the rules and STEP’s work in response to them please access our Policy Point (PDF 253KB)
Common Reporting Standard (CRS)
The mechanism has been designed by the Organisation for Economic Cooperation and Development (OECD) as a method of exchanging financial information between jurisdictions in order to combat tax evasion.
The system means that accounts deemed to be reportable (the accounts owned by an individual that is tax resident in another CRS jurisdiction).
Over 100 jurisdictions are now committed to exchange information under the system.
To find out more about the system and STEP’s work on it please access our Policy Point (PDF 152KB).
Foreign Account Tax Compliance Act (FATCA)
This legislation is an attempt to combat non-compliance by United States taxpayers who use foreign accounts.
The measures have been in place since 2014 and require all non-US financial institutions in participating jurisdictions to identify all US Persons who use foreign accounts and subsequently pass details of their identities, balances, withdrawals and receipts to the US tax authorities.
Reports are made on an annual basis and can either be made via the tax authorities of the institution’s jurisdiction or directly to the US depending on which Model of reporting is adopted.
To find out more about the legislation please access our Policy Point (PDF 169KB) .