Are debit card transactions exchanged under the CRS?

[jafo]

An entire subsection of the financial services and compliance SAAS market is focused on selling CRS parsing and automation solutions to tax authorities.

I had NO idea! How do they get our data? Isn't the info and our Tx private? (except for gov.?)

Are the banks selling this data?

 

[Sols]

I had NO idea! How do they get our data? Isn't the info and our Tx private? (except for gov.?)

Are the banks selling this data?

This is how the information flows:

1. Financial institution (FI) collects information.
2. FI submits information via online portal or API to their competent authority ("CA", usually their local tax authority, FSA, or FIU).
3. The competent authority sends the data to each relevant jurisdiction's CA.
4. The new CA receives the data.

Countries enter into MCAAs (Mutual Competent Authority Agreements) with each other to establish with whom they shall share data with and receive data from.

CRS is basically just XML files, which are designed by automatically parsable. The software vendors making CRS XML parsers sell them to the CAs, not to the banks. Every software I've seen/heard of has been installed on-premises (on the CA's servers). Due to data protection and other privacy laws, the vendor doesn't have access to the data.

 

[jafo]

This is how the information flows:

1. Financial institution (FI) collects information.
2. FI submits information via online portal or API to their competent authority ("CA", usually their local tax authority, FSA, or FIU).
3. The competent authority sends the data to each relevant jurisdiction's CA.
4. The new CA receives the data.

Countries enter into MCAAs (Mutual Competent Authority Agreements) with each other to establish with whom they shall share data with and receive data from.

CRS is basically just XML files, which are designed by automatically parsable. The software vendors making CRS XML parsers sell them to the CAs, not to the banks. Every software I've seen/heard of has been installed on-premises (on the CA's servers). Due to data protection and other privacy laws, the vendor doesn't have access to the data.

This is a very important piece of information to know! Thank you for sharing!

 

[Radko]

An entire subsection of the financial services and compliance SAAS market is focused on selling CRS parsing and automation solutions to tax authorities.

The ROI calculation is a no-brainer. Spend a few hundred thousand on a piece of software to collect millions in unpaid taxes.


We'll see if the rest of the world takes a page out of US' playbook, where FATCA non-compliance comes with a 30% haircut one every USD transaction. Currently no such mechanism exists but it probably wouldn't be hard to get enough EU members to agree on it and have ECB implement something similar. Another weapon they have in their arsenal is to threaten to blacklist the whole jurisdiction if a bank is misbehaving and not being punished for it.

Time will tell.

Some tax agencies are now starting to use AI to analyze all the data, but up to now CRS has been a joke for the most part.

A friend was investigated by the tax authorities, he had an undeclared offshore account, but tax authorities never even bother to check the CRS. Maybe he got lucky.

I guess as time goes on tax agencies will improve, but there will always be countries that do not benefit from belonging to the CRS.

 

[Sols]

Some tax agencies are now starting to use AI to analyze all the data, but up to now CRS has been a joke for the most part.

It's definitely been giving some people a false sense of security. When these new tools are implemented and properly trained/configured, the tax authorities can go back however far the statute of limitation is on tax crimes and process old data.

 

[wellington]

This is how the information flows:

1. Financial institution (FI) collects information.
2. FI submits information via online portal or API to their competent authority ("CA", usually their local tax authority, FSA, or FIU).
3. The competent authority sends the data to each relevant jurisdiction's CA.
4. The new CA receives the data.

Countries enter into MCAAs (Mutual Competent Authority Agreements) with each other to establish with whom they shall share data with and receive data from.

CRS is basically just XML files, which are designed by automatically parsable. The software vendors making CRS XML parsers sell them to the CAs, not to the banks. Every software I've seen/heard of has been installed on-premises (on the CA's servers). Due to data protection and other privacy laws, the vendor doesn't have access to the data.

When NK or Iran hacks and publishes the data - it will be painful but will be a reckoning for our dear overlords

Some tax agencies are now starting to use AI to analyze all the data, but up to now CRS has been a joke for the most part.

A friend was investigated by the tax authorities, he had an undeclared offshore account, but tax authorities never even bother to check the CRS. Maybe he got lucky.

I guess as time goes on tax agencies will improve, but there will always be countries that do not benefit from belonging to the CRS.

Biggest government recruitments since Covid have been for tax offices