Question How is a Offshore Company treated regarding CRS?

[Uajksi]

If someone has a offshore company, for example in Dubai, and opens a bank account in Seychelles with companies physical address in Portugal (as the offshore company itself has no physical address in the UAE only P.O.), and the 100% shares owner, director and benefical owner (also the one who opened the bank) lives in Serbia, how will reporting (CRS/AEOI/FACTA etc.) work?

Will the bank report nothing, as the individual person lives in Serbia?
- OR -
Will the bank report to Dubai, because the company is formated there?
- OR -
Will the bank report to Portugal, because the company has its physical address there?

Does anyone have experience with that? Thanks in advance.

 

[Sols]

It's very hard to say for sure.

In principle, reporting under CRS is to the UBO's country of tax residence. If that's Serbia, there is no reporting to do.

However, if you provide Portugal as a place of doing business, a decision could be made to report to Portugal as well.

 

[Martin Everson]

I will add that the Dubai company itself will be reported by UAE to UBO's home country also as discussed below.

https://www.offshorecorptalk.com/th...es-with-no-substance-with-ubos-country.36103/
I will also add that Serbia joined in 2019 the Multilateral Convention on Mutual Administrative Assistance in Tax Matters convention and is on route to AEOI.

https://www.oecd.org/countries/serb...efforts-against-tax-evasion-and-avoidance.htm

 

[JimBeam]

As far as I know, if you have Emirates ID, UAE banks will consider you resident and will not report you to your home country.

 

[mrmrmanhuman]

If someone has a offshore company, for example in Dubai, and opens a bank account in Seychelles with companies physical address in Portugal (as the offshore company itself has no physical address in the UAE only P.O.), and the 100% shares owner, director and benefical owner (also the one who opened the bank) lives in Serbia, how will reporting (CRS/AEOI/FACTA etc.) work?

Will the bank report nothing, as the individual person lives in Serbia?
- OR -
Will the bank report to Dubai, because the company is formated there?
- OR -
Will the bank report to Portugal, because the company has its physical address there?

Does anyone have experience with that? Thanks in advance.

It depends on the nature of your entity in Dubai.

1. If it is a financial institution under the definiitons of CRS = Not reported
2. If it is considered and declared as an active entity with active business, then it is reported to the country of its residence (where management is conducted or whichever prevailing tax rules on residency)
3. If it is neither of the two, it is a passive entity (likely), the bank will request the details of the controlling person which is the 100% owner, and report that person based on where she/he is resident in.