Automatic exchange of information in EU. We hereby point out that as of 1.1.2016, the Common Reporting Standard (CRS) legislation originated at the initiative of the OECD and inherent in the annual automatic exchange of information between Tax Authorities came into force, to which about 80 states have adhered so far.
This legislation introduced to Financial Intermediaries (Banks etc.), a series of checks aimed at correctly identifying their customers, with the objective of identifying those who are tax resident abroad, who will be subject to reporting to the national Tax Authority.
Specifically, according to the regulations referring to the automatic exchange of information in the EU , indications of presumed foreign tax residence are subject to analysis including:
– for individuals, tax and registered residence, domicile, telephone numbers, and granting of power of attorney to persons with foreign addresses for legal entities, place of incorporation, place of operation, and characteristics of persons exercising control.
Upon detecting the presence of a clue, the Intermediary is required to acquire specific supplementary documentation in order to ascertain the actuality of foreign tax residence.
This legislation reinforces the need to be assisted by serious and competent professionals who can explain international tax law and the correct way of conducting economic activity in the territory of the EU.
