OECD Common Reporting Standards (or CRS) are global standards applied by financial institutions for automatic exchange of information, aimed at identifying the effective tax residence and any investment income, account balances and sales proceeds of a foreign individual or corporate account holder. The UAE has already issued primary legislation on the topic in 2012 and now that also secondary legislation is in place, UAE financial institutions are expected to start exchanging information by beginning of 2018. In preparation, banks have already started alerting their clientele. The CRS system will potentially affect a large number of expatriates coming mostly from European countries. US expatriates are subject to their own system called Foreign Account Tax Compliance Act (or FATCA), which is officially supported by the UAE by way of an agreement signed in 2015. Although the CRS system has the purpose of capturing tax evasion situations, it will certainly be (or be felt) disruptive, particularly at the initial stage.
Author: Franco Grilli