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CRS to be implemented in banks

29/12/2015 14:46
From January 1, 2016, for new customers, banks will have to request and receive information on the country of tax residence as well as on the tax identification number, for non-tax residents of Cyprus.

According to an announcement by the Association of Banks in relation to the CRS and what it means for customers of member banks, "without the document of self-certification with basic required information, the financial institution is unable to open an account '.

For existing customers, "the member banks may contact the persons affected by the CRS, to collect a self-certification document, which will define their country of tax residence and will provide the tax identification number."

It is added that "financial institutions will be subject to penalties for failure to comply, as will be determined by law".

Cyprus is among the 56 early adopter countries for which the Common Reporting Standard implementation will be begin in 2016, with the first exchange of information to take place in September 2017 covering 2016. For the rest 40 countries that are not included in the early adopters, reporting will begin in 2018.

The Standard, developed in response to the G20 request and approved by the OECD Council on 15 July 2014, calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. It sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions.

Marios Skandalis member of the board of directors of the Cyprus Institute of Certified Public Accountants, said that CRS represents a tool at the disposal of tax authorities to locate hidden income and capital located overseas.

“The information to be accessed by the Cyprus government will enable it to locate and tax income and capital belonging to Cypriot nationals which have been hidden in banking institutions abroad,” he said in an interview with CNA in October 2015.