Wise is now CRS compliant

[Giorgiogori]

Thank you both,
i think they still dont report (at least for low turnovers) but i was surprised because in their previous privacy statements they went from stating "no reporting" to "assets reporting" and now they separated the statements regarding assets (asking for a tax identification code) and a more general statement regarding crs. I wonder why and this could be a signal they are going through some major changes.

 

[karishi]

Thank you both,
i think they still dont report (at least for low turnovers) but i was surprised because in their previous privacy statements they went from stating "no reporting" to "assets reporting" and now they separated the statements regarding assets (asking for a tax identification code) and a more general statement regarding crs. I wonder why and this could be a signal they are going through some major changes.

So the thing is that reporting or not reporting is not a choice, either you are forced to report or you are not forced to. With assets they are forced, because the entity that they have that holds asset has a licence that forces them to report. I have friends which worked on a brokerage account which was not reporting even if forced to, and....the brokerage account failed and a lot of money disappeared. Avoid at all costs entities which are forced to report but will not, they don't end well, think of Loyal Bank.
Currently only banks of countries that have subscribed to CRS or FATCA are forced to report, not EMIs, because EMIs are not bank. Since the USA has not subscribed to CRS, if you are from europe and have an account with a USA bank, you are not reported. With Wise even if you have an account with a belgian IBAN, that is a virtual account, it's Wise which is holding your money in a single account, so that's why there is no reporting even if you have a EUR IBAN.
Of course Wise collaborates with OECD, they are a public company, and that's why you can't use Wise Business for a lot of things. But collaborating means "trying to prevent money laundering", which means that if Wise detects suspicious activities they might proactively signal you to the relevant autorities ( they were fined in....Abu Dhabi for not being vigilant enough, if you can believe such a thing said by UAE ).
But Wise also has clear that not having automatic CRS is a plus for its customer, so it has to walk a thin line between all the conflicting interests. The difference with othe EMIs is that Wise is profitable on it's main business, which is currency conversion, so for now they have been able to live without a banking licence. Revolut was losing vast amounts of money before getting that bank licence. And the fact that Wise is profitable is what make people trust wise with sums which are higher than what you would normally leave on an EMI: if Wise fails spectacularly, you don't get any money back, while EU banks customer are protected up to 100k from the EU in case the bank fails.
Nobody can predict what will happen, and again, the fact that wise doesn't report automatically doesn't mean that the tax authority will never know, they simply have to ask wise if you have an account.

 

[Giorgiogori]

Fair enough .. Makes absolute sense.

Thanks

 

[European]

Currently only banks of countries that have subscribed to CRS or FATCA are forced to report, not EMIs, because EMIs are not bank. Since the USA has not subscribed to CRS, if you are from europe and have an account with a USA bank, you are not reported.

I do not think that's accurate. If you read any FATCA agreement between the US and a EU country you will see the US reports several types of accounts, including personal accounts.

 

[Mssquirrel]

I do not think that's accurate. If you read any FATCA agreement between the US and a EU country you will see the US reports several types of accounts, including personal accounts.

Yes, but FATCA doesn't the same way as CRS is not like they will automatically send a report at the end of the year it depends on the type of the account but many are not reported unless of course your country ask for the information of accounts in your name.

 

[karishi]

I do not think that's accurate. If you read any FATCA agreement between the US and a EU country you will see the US reports several types of accounts, including personal accounts.

Yes, but FATCA doesn't the same way as CRS is not like they will automatically send a report at the end of the year it depends on the type of the account but many are not reported unless of course your country ask for the information of accounts in your name.

I also think that FATCA goes in the US direction only, or at least that's what I have always understood

 

[Martin Everson]

Just to correct you. FATCA is bidirectional and automatic. We discuss it in below thread in detail if you read it all.

https://www.offshorecorptalk.com/th...n-us-person-deposits-in-them.22676/post-68608

 

[karishi]

Just to correct you. FATCA is bidirectional and automatic. We discuss it in below thread in detail if you read it all.

https://www.offshorecorptalk.com/th...n-us-person-deposits-in-them.22676/post-68608

thans for the clarification! So basically no reporting if no interest.

 

[LongShanks]

Good morning,
I am a newbie here looking for peoples opinion if I may.?

Having had a WISE account for a good number of years now, I was a bit put off when asked to re-identify via passport and selfie.
They even wanted to biometric, but could avoid.

My questions are : why would they do this ? preparation for CRS or could this be the onset of a potential tax probe ?

I live in Spain of all places, file my taxes and all, but have a £ nestegg I am trying to protect.

Could transfers to REVOLUT or Sabadell have triggered this ?
Daft, but had to fill the fridge…

I understand the spanish are particularly hungry for expat dineros in 2023 and am afraid that WISE transfers might be my undoing…

Thank you for sharing your thoughts.

 

[karishi]

Good morning,
I am a newbie here looking for peoples opinion if I may.?

Having had a WISE account for a good number of years now, I was a bit put off when asked to re-identify via passport and selfie.
They even wanted to biometric, but could avoid.

My questions are : why would they do this ? preparation for CRS or could this be the onset of a potential tax probe ?

I live in Spain of all places, file my taxes and all, but have a £ nestegg I am trying to protect.

Could transfers to REVOLUT or Sabadell have triggered this ?
Daft, but had to fill the fridge…

I understand the spanish are particularly hungry for expat dineros in 2023 and am afraid that WISE transfers might be my undoing…

Thank you for sharing your thoughts.

Wise policy has not changed and will not report to tax authorities unless you move above a certain threshold of money, as all transactions above a certain thresold needs to be reported, I think it is 10k euro. Re Identification is normal and it's part of KYC, I would not see anything strange here, it would be more suspect if they asked for the TIN.
Transferring money to a Sabadell account is a risk of course, but I don't think it will trigger anything, I mean, if you end up being investigated by the hacienda, it will make no difference as they will immediately look into wise. It all depends on how much you are declaring vs not declaring vs your lifestyle

 

[LongShanks]

Wise policy has not changed and will not report to tax authorities unless you move above a certain threshold of money, as all transactions above a certain thresold needs to be reported, I think it is 10k euro. Re Identification is normal and it's part of KYC, I would not see anything strange here, it would be more suspect if they asked for the TIN.
Transferring money to a Sabadell account is a risk of course, but I don't think it will trigger anything, I mean, if you end up being investigated by the hacienda, it will make no difference as they will immediately look into wise. It all depends on how much you are declaring vs not declaring vs your lifestyle

Thanks a lot for that insight.

So 10k+ sets of the alarm and is reported ?!?

To whom ? Hacienda direct ? or the Belgiques ?
If the latter, do they pass data straight on to ES ?

In any case, none of the above is good.

…I forgot to ask : WISE is a red flag then which prompts authorities probing in any case ?

or could a big enough bone distract the beast ?

 

[Mike Forman]

Thanks a lot for that insight.

So 10k+ sets of the alarm and is reported ?!?

To whom ? Hacienda direct ? or the Belgiques ?
If the latter, do they pass data straight on to ES ?

In any case, none of the above is good.

…I forgot to ask : WISE is a red flag then which prompts authorities probing in any case ?

or could a big enough bone distract the beast ?

Transaction above 10keur will be reported to your country of residence.

Some Belgian citizen created a fee months ago a new personal wise bank account and after one month it was already linked and visible to his online government account where all bank accounts and 6 month ending balance of your bank accounts are visible.

Wise is a registered bank, registered in Belgium so as any other bank should comply with CRS.

If you Google wise crs compliant you get:

Does Wise share tax information with anyone? We'll only share your tax information with relevant government tax authorities if we need to. This is so Wise complies with international tax standards like the Common Reporting Standard (CRS) or the Foreign Account Tax Compliance Act (FATCA).

 

[LongShanks]

Transaction above 10keur will be reported to your country of residence.

Some Belgian citizen created a fee months ago a new personal wise bank account and after one month it was already linked and visible to his online government account where all bank accounts and 6 month ending balance of your bank accounts are visible.

Wise is a registered bank, registered in Belgium so as any other bank should comply with CRS.

If you Google wise crs compliant you get:

Does Wise share tax information with anyone? We'll only share your tax information with relevant government tax authorities if we need to. This is so Wise complies with international tax standards like the Common Reporting Standard (CRS) or the Foreign Account Tax Compliance Act (FATCA).

…so irrespective of whether EMI or bank : 10K will expose you…

I need a drink…

Transaction above 10keur will be reported to your country of residence.

Some Belgian citizen created a fee months ago a new personal wise bank account and after one month it was already linked and visible to his online government account where all bank accounts and 6 month ending balance of your bank accounts are visible.

Wise is a registered bank, registered in Belgium so as any other bank should comply with CRS.

If you Google wise crs compliant you get:

Does Wise share tax information with anyone? We'll only share your tax information with relevant government tax authorities if we need to. This is so Wise complies with international tax standards like the Common Reporting Standard (CRS) or the Foreign Account Tax Compliance Act (FATCA).

Drink in hand I do understand, but lets assume tranfers were made around 12-13 months ago ?

Same deal ? (more whisky…)

Thanks.

 

[karishi]

Transaction above 10keur will be reported to your country of residence.

Some Belgian citizen created a fee months ago a new personal wise bank account and after one month it was already linked and visible to his online government account where all bank accounts and 6 month ending balance of your bank accounts are visible.

Wise is a registered bank, registered in Belgium so as any other bank should comply with CRS.

If you Google wise crs compliant you get:

Does Wise share tax information with anyone? We'll only share your tax information with relevant government tax authorities if we need to. This is so Wise complies with international tax standards like the Common Reporting Standard (CRS) or the Foreign Account Tax Compliance Act (FATCA).

Wise is a registered bank but it holds all money in the same account, so having an account on wise doesn't mean you get reported. Wise itself gets reported.
This is clearly explained with wise cashback:

Do you share personal information with the tax authorities?​

No. Wise Europe files a monthly withholding tax return with the Belgian tax authority showing the total withholding tax due each month. We do not reveal any personal information.

We keep customer data on file internally for audit and documentation purposes. We would only provide customer details to the tax authority if requested and according to GDPR regulations.

…so irrespective of whether EMI or bank : 10K will expose you…

I need a drink…


Drink in hand I do understand, but lets assume tranfers were made around 12-13 months ago ?

Same deal ? (more whisky…)

Thanks.

Well, the central tax authority gets notified. They wil receive millions of notifications, so that doesn't mean anything. As usual keep in mind that doing an investigation is costly for a tax authority, so there is always a "return on investment" reasoning on who to investigate first: it all boils doen to how much money you are keeping to yourself. Also if you are an expat in spain, you can always say goodbay to spain and move elsewhere, as long as you don't have anything tangible in spain, like a house

 

[LongShanks]

Wise is a registered bank but it holds all money in the same account, so having an account on wise doesn't mean you get reported. Wise itself gets reported.
This is clearly explained with wise cashback:

Do you share personal information with the tax authorities?​

No. Wise Europe files a monthly withholding tax return with the Belgian tax authority showing the total withholding tax due each month. We do not reveal any personal information.

We keep customer data on file internally for audit and documentation purposes. We would only provide customer details to the tax authority if requested and according to GDPR regulations.


Well, the central tax authority gets notified. They wil receive millions of notifications, so that doesn't mean anything. As usual keep in mind that doing an investigation is costly for a tax authority, so there is always a "return on investment" reasoning on who to investigate first: it all boils doen to how much money you are keeping to yourself. Also if you are an expat in spain, you can always say goodbay to spain and move elsewhere, as long as you don't have anything tangible in spain, like a house

Truly appreciate you taking the time to explain things like you do Karishi.
Thank you !

From what I have learned I can conclude that it will be best to take on the chin an file as it is and (potentially) not go to jail.
120K tax evasion lands you 5 years btw.

I have had some large numbers going thru WISE last- and some not quite so large this year, but still well above 10K.
Not only am I the proverbial sore thumb…, I probably glow in the dark.
Risk-reward ratio rather risk heavy, especially since Hacienda has announced intensified crackdown on tax evasion this year, meaning tax year 2022.

You assumed correctly that I have a house here.
I love it where I am and having skin in the game affects ones perspective.
I have had a good run at being one of the grey men, but this feels like an enemy I should not engage.

Good luck to us !

 

[karishi]

Truly appreciate you taking the time to explain things like you do Karishi.
Thank you !

From what I have learned I can conclude that it will be best to take on the chin an file as it is and (potentially) not go to jail.
120K tax evasion lands you 5 years btw.

I have had some large numbers going thru WISE last- and some not quite so large this year, but still well above 10K.
Not only am I the proverbial sore thumb…, I probably glow in the dark.
Risk-reward ratio rather risk heavy, especially since Hacienda has announced intensified crackdown on tax evasion this year, meaning tax year 2022.

You assumed correctly that I have a house here.
I love it where I am and having skin in the game affects ones perspective.
I have had a good run at being one of the grey men, but this feels like an enemy I should not engage.

Good luck to us !

just to clarify: 10k in a single wire. that what gets you reported. And there are plenty of reasons for making 10k payments. I have never ever headr anyone that went to jail for tax evasion, normally in latin countries what gets you to jail is tax fraud, which is different. You should get a hefty fine if caught, although double check. Please remember that if I remember correctly, gestorias will report you if you discuss with them about tax stuff....choose wisely who to discuss this with. Tax fraud is if you are an E-Shop and triangulate stuff to avoid paying VAT. A UK cicitzen sent to jail for tax evasion would be really strange. I am quite sure that a hefty fine is all you risk but don't take my word for it.

 

[Mike Forman]

just to clarify: 10k in a single wire. that what gets you reported. And there are plenty of reasons for making 10k payments. I have never ever headr anyone that went to jail for tax evasion, normally in latin countries what gets you to jail is tax fraud, which is different. You should get a hefty fine if caught, although double check. Please remember that if I remember correctly, gestorias will report you if you discuss with them about tax stuff....choose wisely who to discuss this with. Tax fraud is if you are an E-Shop and triangulate stuff to avoid paying VAT. A UK cicitzen sent to jail for tax evasion would be really strange. I am quite sure that a hefty fine is all you risk but don't take my word for it.

As mentioned above, a transfer above 10k will be automatically reported by a financial institution, which doesnt mean you get questions asked or have any risk. Daily there are millions of such transactions of 10k to millions, so nothing special here.

It is better nonetheless to keep your transactions below that and don't move such large amounts if they aren't legit and have been taxed on any account that is using your Spanish residence.

 

[bandanna]

Dang! I wonder if IBKR are also CRS tax compliant

 

[karishi]

You assumed correctly that I have a house here.
I love it where I am and having skin in the game affects ones perspective.
I have had a good run at being one of the grey men, but this feels like an enemy I should not engage.

Good luck to us !

In any case my advice is:
1) since you have not been investigated so far, lay low. In Italy they have been announcing crackdowns for 30 years. It's a scare tactic. Don't fall to it and turn yourself in. Do not buy anything fancy ( which in spain I think it is anything over 2k ). Keep everything as usual.
2) stop doing what is risky
3) think about a different set up. Rmember that in any case you are a non spanish people paying taxes in Spain: before coming after you, they have much easier targets, spanish citizens.

 

[AnonymousCryptoOTC]

Dang! I wonder if IBKR are also CRS tax compliant

It depends on the jurisdiction.

USA IBKR is not CRS compliant.