Introduction
The Common Reporting Standard (CRS), 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. The Common Reporting Standard (CRS) applies in the European Union under the Council Directive 2014/107/EU amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation. CRS was enacted in Germany with the “Gesetz zum automatischen Austausch von In-formationen über Finanzkonten in Steuersachen“ (FKAustG) dated 21 December 2015.
Legal framework
The G20 finance ministers and central bank governors approved a specific series of measures for the new global standard for the automatic exchange of financial account information on tax matters in September 2014. Μore than 100 countries have signed-up for participating in the CRS reporting regime.
On an annual basis, the German Ministry of Finance publishes a list of participating countries with which data information would be shared: https://www.bundesfinanzministerium.de/Content/DE/Downloads/BMF_Schreiben/Internationales_Steuerrecht/Allgemeine_Informationen/2022-07-04-automatischer-austausch-von-informationen-ueber-finanzkonten-in-steuersachen-nach-dem-FKAustG.pdf?__blob=publicationFile&v=2
The measures aim at tax compliance to combat unreported and untaxed income with regards to offshore financial accounts (i.e., financial accounts held by an ac-countholder who is resident in another country than where the account is kept). The information subject to reporting under CRS is however not restricted to income generated or sourced in the country where the account is kept.
Implementation of framework
The financial institutions must:
- Identify and collect relevant information regarding their customers’ tax residency status in countries that participate in the automatic exchange of information.
- Report this information to the competent German tax authority (Bundeszentralamt für Steuern, “BZSt”) every year.
Information reported to the tax authority
The German tax authority exchanges the information collected from the financial institutions with the tax authority where the clients are tax residents. This information includes (on an annual basis or other relevant reporting period):
- Full name / Corporate name
- Address
- Country of residence
- Tax identification number (TIN)
- Date and place of birth
- Account details and balance
- Total gross income in respect of Interest
- Total gross income in respect of Dividends
- Other income derived from financial instruments
To determine the tax regime regarding the CRS and the European Directive of Administrative Cooperation (DAC2), we ask you to fill in special self-certification forms and submit them along with the necessary supporting documents:
- Self-certification form for individuals.
- Self-certification form for entities.
- Self-certification form for controlling persons.
Additional information about the CRS
Given that we cannot offer tax advice, you can get more information on the CRS and the list of jurisdictions / countries that have signed the agreement on automatic exchange of financial account information from:
- The Organisation for Economic Co-operation and Development (OECD) - http://www.oecd.org/tax/automatic-exchange/about-automatic-exchange/
- The information page provided by the German Bundeszentralamt für Steuern („BZSt“): https://www.bzst.de/DE/Privatpersonen/Selbstauskuenfte/CommonReportingStandard/commonreportingstandard.html
- Your tax advisor.
Implementation of the CRS
The CRS applies in Europe by virtue of the European Directive of Administrative Cooperation (DAC2) and in the OECD member countries that have signed the multilateral agreement on automatic exchange of financial account information. In Germany, CRS was enacted with the “Gesetz zum automatischen Austausch von In-formationen über Finanzkonten in Steuersachen“ (FKAustG).
Collection and processing of your personal data under the CRS
Any information we collect based on your self-certification documents is transmitted to the competent tax authorities for the fulfillment of Viva Payments legal obligation, in accordance with the applicable legal framework on the CRS. For information on the processing of your personal data by Viva Payments in accordance with the EU Regulation 2016/679 (General Data Protection Regulation) you can refer to Viva Payments Privacy Policy.