Clarification on CRS Reporting Thresholds

[Var12]

Hi everyone!!
I’ve come across several discussions suggesting that under the CRS, accounts with an average balance below 10,000 USD are not reported. However, there seems to be some confusion regarding the timeframe for calculating the average balance. some sources mention it refers to a year, while others suggest it’s based on a 3-month period. Does anyone know whether these rules are already in effect or if they will apply starting next year? Additionally, are these thresholds relevant only for EMI accounts, or do they also apply to crypto accounts?
Looking forward to your insights!

 

[Martin Everson]

Speak to bank or EMI you use to see how they have implemented CRS reporting if your concerned. Alternatively look for CRS country guidance paper in country where your account is based.

For example Bank of Cyprus offers a CRS faq document explaining how they handle CRS.

https://www.bankofcyprus.com/globalassets/who-we-are/our-governance/fatca-crs-faq-website-en.pdf

Additionally, are these thresholds relevant only for EMI accounts, or do they also apply to crypto accounts?

An amendment to CRS reporting to include crypto assets is coming. But will commence in 2027

https://www.oecd.org/en/about/news/...ation-and-issues-interpretative-guidance.html

 

[daniels27]

For example Bank of Cyprus offers a CRS faq document explaining how they handle CRS.
https://www.bankofcyprus.com/globalassets/who-we-are/our-governance/fatca-crs-faq-website-en.pdf

Please note that AFAIK the preexisting client threshold of 250,000 USD is for exclusion from due diligence, not from reporting.

https://www.oecd.org/content/dam/oe...ssue-focus/aeoi/jersey-guidance-notes-crs.pdf
A jurisdiction may allow Financial Institutions to exclude from its due diligence procedures pre-existing Entity Accounts with an aggregate account balance or value of $250,000 or less as of a specified date. If, at the end of a subsequent calendar year, the aggregate account balance or value exceeds $250,000, the Financial Institution must apply the due diligence procedures to identify whether the account is a Reportable Account. If this option is not adopted, a Financial Institution must apply the due diligence procedures to all Preexisting Entity Accounts.

If you have a look at the OECS FAQ

https://www.oecd.org/content/dam/oe...ternational-co-operation/crs-related-faqs.pdf

3. Excluded Account – Dormant accounts
The Standard provides, as an example of a Low-risk Excluded Account, a dormant account with an annual balance that does not exceed USD 1000. See Commentary on Section VIII, paragraph 103, Example 6. In light of the fact that the USD 1000 threshold is provided as an example, to what extent can jurisdictions electing to include dormant accounts as a Low-risk Excluded Account fix a higher threshold? Even though the USD 1000 amount is only indicative it is expected that jurisdictions electing to include dormant accounts as a Low-risk Excluded Account do not fix a threshold that substantially exceeds this amount.

I would not expect much to be exluded unless dormant and under $2500.

Also note that CRS is generally applying year end balances. FBAR reporting requirements have a $10,000 threshold for balance at any time of the year, maybe OP had this in mind.

 

[Houdini]

So far I did not get reported with Revolut with my dormant account for the 6th year! Assuming dormant accounts won't get reported at least.

 

[Var12]

I have found additional information. @Forester has pointed out that EMI accounts with an average balance below 10,000 USD will not be reported, according to DAC8 approved by the EU Council on October 17, 2023. This will be effective from January 1, 2026. This detail is crucial and should not be underestimated. However, what will happen until January 1, 2026? Will everything below 10,000 USD be reported, or will nothing be reported?

 

[daniels27]

I have found additional information. @Forester has pointed out that EMI accounts with an average balance below 10,000 USD will not be reported, according to DAC8 approved by the EU Council on October 17, 2023. This will be effective from January 1, 2026. This detail is crucial and should not be underestimated. However, what will happen until January 1, 2026? Will everything below 10,000 USD be reported, or will nothing be reported?

The directive you are referring to is here:
https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=OJ:L_202302226

You can find the 10k USD indeed:

a Depository Account that represents all Electronic Money held for the benefit of a customer, if the rolling average 90 days end-of-day aggregate account balance or value during any period of 90 consecutive days did not exceed USD 10 000 at any day during the calendar year or other appropriate reporting period;’;

It is actualy inserted here in this one
https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=OJ:L_202302226
under the excluded accounts in Annex I Section IV.

Hence, yes. After 2026, they do not need to report any acocunt with less than 10k USD anymore. Before that, the old (national) rules apply. I would expect the EU directive to be implemented in national laws within the next couple of months.

 

[Var12]

The Directive of 17 October 2023, amending 2011/16, requires careful and thorough reading. It is not enough to rely on summaries alone, as the text clearly distinguishes between "electronic money" and "crypto." It is important to note that the $10,000 USD threshold applies exclusively to electronic money.

 

[Var12]

see under CRS: https://www.taxathand.com/article/2...ypto-Asset-Reporting-Framework-CRS-amendments

 

[daniels27]

The Directive of 17 October 2023, amending 2011/16, requires careful and thorough reading. It is not enough to rely on summaries alone, as the text clearly distinguishes between "electronic money" and "crypto." It is important to note that the $10,000 USD threshold applies exclusively to electronic money.

Thanks. I fixed it. Seems in 2025 national laws apply. You will hence have to check there.

 

[diro]

ifII understand the discussion correctly, things have been mixed up between EMIs (Electronic Money Institutions) and crypto exchanges, right?

There’s no change for EMIs in 2026, only the fact that crypto exchanges in Europe will also be required to report transactions over $10,000.

 

[Var12]

As mentioned, the $10,000 limit applies to EMIs, not crypto.

 

[Revoltec]

As mentioned, the $10,000 limit applies to EMIs, not crypto.

As far as I know, transactions are never reported under CRS, but amount on the account etc.

 

[Recose]

"a Depository Account that represents all Electronic Money held for the benefit of a customer, if the rolling average 90 days end-of-day aggregate account balance or value during any period of 90 consecutive days did not exceed USD 10 000 at any day during the calendar year or other appropriate reporting period;’;"

Isn't this a massive loophole? These EMI accounts can be used to move cash around same-day and won't even show up on end of day balance

 

[JackAlabama]

"a Depository Account that represents all Electronic Money held for the benefit of a customer, if the rolling average 90 days end-of-day aggregate account balance or value during any period of 90 consecutive days did not exceed USD 10 000 at any day during the calendar year or other appropriate reporting period;’;"

Isn't this a massive loophole? These EMI accounts can be used to move cash around same-day and won't even show up on end of day balance

nah you can never be sure what they are doing. If you need to hide from the communistic crs, this is not the way to do it.

 

[Var12]

The stated reason is data management, which indeed must be considerable. Just imagine how many accounts there might be to monitor, a truly impressive amount of data. However, a 10k average balance is an insignificant amount, especially for those aiming to target tax evaders truly deserving of attention. Can you imagine the authorities chasing after housewives and young people who have only moved small amounts of money?

 

[Martin Everson]

Can you imagine the authorities chasing after housewives and young people who have only moved small amounts of money?

Yes

They are a softer target than wealthy people who can come with a team of lawyers and have much more complex tax affairs. It costs them very little to send an automated mail to your address after system cross checks CRS data against your tax profile on record. Recovering i.e 2,000-5,000k euros here and there 200,000 times adds up quickly.

 

[Var12]

@Martin Everson If the stated decision is to disregard accounts with an average balance of less than 10k, it means they are not acting as you claim.

 

[Martin Everson]

@Var12 I was answering your question. As tax authorities do chase low amounts.

 

[yomboloz]

So far I did not get reported with Revolut with my dormant account for the 6th year! Assuming dormant accounts won't get reported at least.

How do you know if they did or did not report your account?

 

[lavel]

Yes

They are a softer target than wealthy people who can come with a team of lawyers and have much more complex tax affairs. It costs them very little to send an automated mail to your address after system cross checks CRS data against your tax profile on record. Recovering i.e 2,000-5,000k euros here and there 200,000 times adds up quickly.

Totally agree, this is very easy food for the tax monkey in the tax monkey cage.