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CRS, can it ever been retroactive?

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newNomad

Active Member
Jan 25, 2021
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#1
Hi, let's suppose some EMIs start reporting under CRS, can they do so retroactively?
From what was the case of Switzerland when the regulation changed the clients were notified (to provide TIN and prepare for reporting, or move assets/close account)...reporting was activated onl later in the year and many clients afaih moved assets to USA so at year end were reported with 0 balances
What was the practice so far when countries joined CRS, no retroactivity?
 
#3
When a country adopts CRS, its banks must get some new software to comply. Since they didn't have that very specific software before that, all retroactivity looks impossible to me. Besides, remember that when Switzerland said it would follow CRS rules, the news broke some 2 years before the country actually changed.
 
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#4
So we may conclude it is not possible to be retroactive at any point.

I got reported by Mister Tango this year which doesn't matter but it was for 3 years back.
 
#5
uplana said:
So we may conclude it is not possible to be retroactive at any point.

I got reported by Mister Tango this year which doesn't matter but it was for 3 years back.
Click to expand...
Can you elaborate more? How do you know that you were reported, and moreover got to know by whom exactly you were reported? :)
Based on what info you concluded it was for 3 years? It could be very well a different investigation or a usual client who rat you out since you have a long term contractual relationship..
 
#8
If you are being investigated by your local tax authorities there is a chance that they may ask for older CRS reports from the financial instituions. But otherwise only the current year report is sent,so end of december report for 2021 is sent etc. It contains your personal info, total money credited over the year, current money in the account, and if a broker may also report realized capital gains.
 
#9
Interesting thing is this stuff about "total gross money credited", can it potentially raise allarms if the money is moved frequently between accounts?
I.e. a person has EMI accounts A and B. Some gross income is received in A. Then it is transferred to B. From B it's transfered to another FI such as a broker, then back from FI to B and back from B to A.
In the end the CRS report would show:
Account A: Gross inflow double the nominal (real) one
Account B: Gross inflow double the real one totally due to "transition" effects
i.e. based just on the reports you would be claimed double the turnover amound on 2 accounts while in reality the amount you effectively cashed in is 4 times lower.
Of course there is also the final balance, but I guess most people always make it 0 by transfer outside of the scope of reportable accs; thus I deduce in most cases the indicator is actually that gross turnover data point.

Further, are personal accounts treated differently to business accounts? How? I mean the distinction the EMI usually makes (personal vs business), some EMIs even don't open personal
 
#10
newNomad said:
Can you elaborate more? How do you know that you were reported, and moreover got to know by whom exactly you were reported? :)
Click to expand...
LoL, you know that when you get a nice letter from your tax office asking for a bank statement from your account with Mister Tango. I send them a big thank you.
 
#12
newNomad said:
Interesting thing is this stuff about "total gross money credited", can it potentially raise allarms if the money is moved frequently between accounts?
I.e. a person has EMI accounts A and B. Some gross income is received in A. Then it is transferred to B. From B it's transfered to another FI such as a broker, then back from FI to B and back from B to A.
In the end the CRS report would show:
Account A: Gross inflow double the nominal (real) one
Account B: Gross inflow double the real one totally due to "transition" effects
i.e. based just on the reports you would be claimed double the turnover amound on 2 accounts while in reality the amount you effectively cashed in is 4 times lower.
Of course there is also the final balance, but I guess most people always make it 0 by transfer outside of the scope of reportable accs; thus I deduce in most cases the indicator is actually that gross turnover data point.

Further, are personal accounts treated differently to business accounts? How? I mean the distinction the EMI usually makes (personal vs business), some EMIs even don't open personal
Click to expand...
I don't think it's a good idea to do that since inflows are just summed up. I mean there's nothing illegal in sending money to yourself in circles but you are obviously making the number reported bigger which equals a higher chance of raising a red flag.
 
#14
newNomad said:
Can you elaborate more? How do you know that you were reported, and moreover got to know by whom exactly you were reported? :)
Click to expand...
they reported the account number to the tax office, that means the tax office requested a bank statement for this account including all other accounts they know about for the same period. Nice right ;)
 
#15
they reported an empty account number without any other data, and then proactively the tax office asked for all other accounts with that institution?
must be big $ in play lol
 
#16
AEOI statements are : report of balance plus total yearly earned interests paid into that account.
Due date for report is 30 september but we often read here 31 December ?
softwares are softwares : who knows if some don’t report all your transactions ?
 
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