Automatic Exchange of Information - FATCA & CRS
Automatic Exchange of Information:
The Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) are two international tax agreements that require financial institutions to provide information about their foreign account holders to their respective tax authorities in order to combat tax evasion.
Foreign Account Tax Compliance Act (FATCA):
The United States enacted FATCA in 2010, requiring financial institutions to submit information on their U.S. account holders to the Internal Revenue Service (IRS) . The account holder's name, address, taxpayer identification number, and account balance must all be provided.
FATCA applies to all financial institutions globally, and noncompliant financial institutions may face penalties. FATCA has been shown to be effective in increasing the amount of tax income received by the IRS while also discouraging tax evasion by US citizens and residents.
Common Reporting Standard (CRS):
CRS was created in 2014 by the Organization for Economic Co-operation and Development (OECD) and is based on FATCA principles. Financial institutions are required by CRS to provide information on their account holders to the tax authorities in the country where the account holder resides. The account holder's name, address, taxpayer identification number, and account balance must all be provided. CRS is used by financial institutions in over 100 countries and has been shown to increase tax revenue collected by tax authorities globally. CRS has also aided in the prevention of tax evasion by individuals and corporations with foreign accounts.
What is the difference?
The main difference between FATCA and CRS is that FATCA is a unilateral agreement between the United States and other nations, whereas CRS is a multilateral agreement between the OECD and its member countries. This means that FATCA exclusively applies to US account holders, whereas CRS applies to all nations that have signed the agreement.
For further information on FATCA - please visit IRS website
For further information on CRS - please visit OECD website
UAE Ministry of Finance FATCA & CRS details, click here
Note: Please ensure to advise Emirates Islamic Bank PJSC within 30 days of any change in circumstances which affects the tax residency status of the account/relationship holder maintained within the Bank or causes the information contained herein to become incorrect, and to provide Emirates Islamic with a suitably updated Self-Certification and Declaration within 30 days of such change in circumstances. Kindly note that FATCA/CRS Self-Certification to be provided willingly, without advice or help from Emirates Islamic Bank PJSC.Check out our products for all your banking needs
