The Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) present significant structural changes in governments’ efforts to improve global tax compliance.

These are two disctinct laws which address tax identification and reporting requirements.

a)Foreign Account Taxation Compliance Act (FATCA)

Extra-territorial requirements on payment of US tax on US earnings. Obligates financial institutions to assess customers as US persons and report. Australia has signed an Inter -Governmental Agreement with the IRS. With effect from 1 July 2014 these amendments will require Australian financial institutions to collect information about their customers who are likely to be tax payers in the United States of America and to provide that information to the Commissioner of Taxation (ATO) who will in turn provide that information to the IRS.

ICBC has registered with the IRS and has been issued a GIIN.

b)Common Reporting Standard (CRS)

The Common Reporting Standard (CRS) forms part of a global tax transparency initiative aiming at preventing tax evasion. CRS was inspired by the Foreign Account Tax Compliance Act (FATCA) and is incorporated into Australian Tax Laws Amendment Act 2016.

The regime applies to customers who are foreign tax residents or entities connected to foreign tax residents. Accounts held by entities (such as companies, trusts, partnerships, associations) will need to disclose the tax residence of the entity, nature of the entities business and in some instances, the individuals who control or beneficially own the entity or have specific connections to the entity. This includes their tax residency and their tax payer identification number if they are tax residents outside of Australia.

ICBC will need to collect and report to the ATO, financial account information on non-residents. ICBC will report this information through to the ATO on the prescribe reporting dates. The ATO will exchange this information with the participating tax authorities of those non-residents. In parallel the ATO will be receiving financial account information on Australian residents from other countries tax authorities.

If you have any questions regarding your tax status we suggest that you consult with your tax advisor. ICBC Sydney will not be able to provide any legal or tax advice.