Is it really useful to empty accounts at the end of the year?

[Var12]

Has been said that bank accounts should be emptied by December 31 to avoid the CRS report of the end-of-year balance. Now, in some recent posts, I read that this isn’t the case and that emptying accounts by December 31 is pointless. What is the truth? What should one do?

 

[Clank]

They report the incoming and outgoing amounts so it's useless.

 

[JackAlabama]

Has been said that bank accounts should be emptied by December 31 to avoid the CRS report of the end-of-year balance. Now, in some recent posts, I read that this isn’t the case and that emptying accounts by December 31 is pointless. What is the truth? What should one do?

its useless. If youre worried about that, you can approach that from another angle.

 

[daniels27]

Have you checked this one:
https://www.oecd.org/content/dam/oe...ation-in-tax-matters_ab3a23bc/896d79d1-en.pdf
Page 97 lists what is being reported, transactions are not listed there. But please note that in case of fraud/suspicion your government can request further details from the banks.

Hence I would say that for CRS, it would work. For FBAR (US) it does not help as you need to report the highest balance throughout the year.

 

[Dh8]

They report the incoming and outgoing amounts so it's useless.

For bank accounts CRS only automatically reports interest earned and the balance on December 31. Incoming and outgoing amounts from your other accounts or from other people are not automatically reported.

That being said, the existence of the foreign bank account would now be known by the resident country's tax authorities.

I have never heard of it actually being done, but the tax authorities can look into the zero balance and are able to ask the foreign bank for statements.

Whether one wants to take that risk and empty the accounts before year end, it's up to them. If you're a tax resident of a country in North America or the EU, I personally wouldn't.

 

[Clank]

For bank accounts CRS only automatically reports interest earned and the balance on December 31. Incoming and outgoing amounts from your other accounts or from other people are not automatically reported.

That being said, the existence of the foreign bank account would now be known by the resident country's tax authorities.

I have never heard of it actually being done, but the tax authorities can look into the zero balance and are able to ask the foreign bank for statements.

Whether one wants to take that risk and empty the accounts before year end, it's up to them. If you're a tax resident of a country in North America or the EU, I personally wouldn't.

That’s not true. If that was the case CRS would be useless.