CRS and FATCA for tax transparency
The environment for tax reporting between international jurisdictions has been undergoing significant change in a global effort to improve tax transparency. An example is the Foreign Accounts Tax Compliance Act (FATCA), imposed by the USA which started in 2014. Drawing extensively on FATCA, the Organisation for Economic Co-operation and Development (OECD) Common Reporting Standard (CRS) is a further international initiative and is based on the development of a single global standard for the automatic exchange of information between tax authorities.
CRS and FATCA legislation encourage better tax compliance by preventing persons from using financial organisations and foreign entities to avoid taxation on their income and assets. Financial institutions in the UK are required by UK law to seek answers to certain questions for the purposes of identifying those accounts which are reportable to HM Revenue & Customs (HMRC), and through HMRC to the respective tax authorities party to CRS and FATCA.
The first exchange of information, covering 49 jurisdictions including the UK and all other EU member states, took place in May 2017 for the reporting year 2016. Around 50 other jurisdictions have committed to adopt CRS the reporting year 2017. Click here for the full list of the committed participating jurisdictions.
Accounts held with Cynergy Bank, that fall within the scope of a Reportable Account in CRS or FATCA, are subject to reporting on an annual basis. A Reportable Account is an account held by one or more Reportable Persons.
Therefore, when applying for one of our products we require our applications to be fully completed to ensure compliance with the regulations. As part of the application, a declaration (also known as self-certification) is required to confirm that the information provided is correct and that any changes will be notified to us within 30 days. Some examples of the type of information required are shown in the Am I affected by CRS or FATCA section below.
In January 2016 we wrote to account holders advising of our legal requirement to report under CRS and FATCA. Should we need to collect further information we will advise affected customers personally.
Further information on CRS and FATCA is available on GOV.CO.UK
Cynergy Bank has produced Guidance notes relating to CRS and FATCA defined terms and meanings for reference purposes when completing an application for any type of business accounts. The Guidance notes do not constitute tax advice.
Our commitment to you
Cynergy Bank is committed to complying with CRS and FATCA requirements fully and transparently, and to collecting relevant information with a minimum burden on our customers.
Cynergy Bank cannot provide any tax advice and is unable to comment on an account holder’s tax position. The Guidance notes for business account applications are provided for reference purposes only and do not constitute tax advice. If you require further assistance you should seek professional advice.
Businesses and other types of entities
If you apply for a business account you must fully complete the application, which contains details of all the information and documentation you are required to provide for CRS and FATCA reporting, including the Tax Identification Number and CRS / FATCA Status for your business. As part of an application you will need to declare that the information you have provided is accurate, which acts as a self-certification for the purposes of CRS and FATCA.
You will also need to provide details for each Controlling Person, or Beneficial Owner holding 25% or more of the business, including if they are a US Person*. Please see the Guidance notes for definitions of these terms. If the required information is not provided we may not be able to proceed with an application for a new account.
Under CRS and FATCA, banks are required to report account information to their local tax authority (HMRC in the UK) where information in their records indicates that the account holder is resident or potentially resident in a Reportable Jurisdiction (such as Cyprus, Greece or the USA).
The regulations require businesses and other entity types to determine their CRS / FATCA Status (see Guidance notes). Most businesses that are not Financial Institutions are likely to be Passive Non-Financial Entities (NFE) or Active NFE. The terms Passive and Active are explained in our Guidance notes and further information can be found on GOV.CO.UK
If a business or entity does not provide its CRS / FATCA Status then we may use information in our possession, or information that is publicly available, to determine its CRS / FATCA Status. If you are an account holder and want to check the CRS / FATCA Status we have in our records, or to provide a CRS / FATCA Status if not previously provided, please contact your Relationship Manager or email us at firstname.lastname@example.org.
If you are submitting a business application and require an Additional CRS status / FATCA status form, please contact Customer Service.
If you apply for a personal account you must fully complete the application which contains all the questions you are required to provide, including your National Insurance Number or equivalent outside the UK. You will also need to confirm whether you are a US person*. Under CRS and FATCA, banks are required to report information to their local tax authority (HMRC in our case) for accounts held by individuals resident in Reportable Jurisdictions (such as Cyprus, Greece or the US) or whose details indicate that they may potentially be tax resident in a Reportable Jurisdiction. If you do not provide the required information we may not be able to proceed with your application.
*A US Person for the purpose of the Foreign Account Tax Compliance provisions (commonly known as FATCA) includes US citizens (even if residing outside the USA) or resident individuals. A resident individual could include, but is not limited to, Green Card holders and individuals that meet relevant substantial presence tests. If you require guidance on the substantial presence test please visit the HMRC website or seek professional advice.
This page and our Guidance Notes are not intended and cannot be used as a substitute for the final US Treasury Regulations, Intergovernmental Agreements or related documents. The information given above and in the Guidance Notes is based on laws and guidance which may subject to change in content and interpretation. It is not comprehensive and does not constitute advice. Applicants should consult their own professional advisers if in doubt.