Model Mandatory Disclosure Rules for Addressing CRS

Model Mandatory Disclosure Rules For Addressing Crs-Free PDF

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Model Mandatory Disclosure,Rules for CRS Avoidance. Arrangements and Opaque,Offshore Structures, This work is published under the responsibility of the Secretary General of the OECD The. opinions expressed and arguments employed herein do not necessarily reflect the official views. of OECD member countries, This document as well as any data and map included herein are without prejudice to the status. of or sovereignty over any territory to the delimitation of international frontiers and boundaries. and to the name of any territory city or area,Please cite this publication as. OECD 2018 Model Mandatory Disclosure Rules for CRS Avoidance Arrangements and. Opaque Offshore Structures OECD Paris www oecd org tax exchange of information. model mandatory disclosure rules for crs avoidance arrangements and opaque offshore. structures pdf,Photo credits nikkytok Shutterstock com.
You can copy download or print OECD content for your own use and you can include excerpts from OECD publications databases. and multimedia products in your own documents presentations blogs websites and teaching materials provided that suitable. acknowledgment of the source and copyright owner is given All requests for public or commercial use and translation rights should. be submitted to rights oecd org Requests for permission to photocopy portions of this material for public or commercial use shall be. addressed directly to the Copyright Clearance Center CCC at info copyright com or the Centre fran ais d exploitation du droit de copie. CFC at contact cfcopies com,FOREWORD 3, On 15 July 2014 the OECD published the Standard for Automatic Exchange of Financial Account. Information in Tax Matters also known as the Common Reporting Standard or CRS Since then 102. jurisdictions have committed to its implementation in time to commence exchanges in 2017 or 2018. With exchanges under the CRS having now commenced amongst almost 50 jurisdictions there has been. a major shift in international tax transparency and the ability of jurisdictions to tackle offshore tax. At the same time information from academic studies and media leaks combined with more recent. information collected through compliance activities of a number of tax administrations as well as the. results from the OECD s disclosure initiative demonstrate that professional advisers and other. intermediaries continue to design market or assist in the implementation of offshore structures and. arrangements that can be used by non compliant taxpayers to circumvent the correct reporting of. relevant information to the tax administration of their jurisdiction of residence including under the. It is against this background that the Bari Declaration issued by the G7 Finance Ministers on 13 May. 2017 called on the OECD to start discussing possible ways to address arrangements designed to. circumvent reporting under the Common Reporting Standard or aimed at providing beneficial owners. with the shelter of non transparent structures The Declaration states that these discussions should. include consideration of model mandatory disclosure rules inspired by the approach taken for. avoidance arrangements outlined within the BEPS Action 12 Report. The Model Mandatory Disclosure Rules for CRS Avoidance Arrangements and Opaque Offshore. Structures contained in this report were approved by the Committee of Fiscal Affairs CFA on 8 March. 2018 This approval does not entail endorsement as a minimum standard The design of the model rules. draws extensively on the best practice recommendations in the BEPS Action 12 Report while being. specifically targeted at these types of arrangements and structures. MDR FOR CRS AVOIDANCE ARRANGEMENTS AND OPAQUE OFFSHORE STRUCTURES OECD 2018. TABLE OF CONTENTS 5,Table of contents,Foreword 3,Table of contents 5. Abbreviations and acronyms 7,I Introduction 9,Key Elements 10. Hallmarks 10, Definition of Intermediary and Timing of Disclosure Obligations 11. Information required to be disclosed 11, Penalties and other mechanisms for dealing with non compliance 12.
II Model Rules 13,1 Definitions 14,Rule 1 1 CRS Avoidance Arrangement 14. Rule 1 2 Opaque Offshore Structure 15,Rule 1 3 Intermediary 16. Rule 1 4 Other Definitions 17, 2 Requirement to disclose CRS avoidance arrangements and opaque offshore structures 19. Rule 2 1 Obligation on Intermediary to Disclose 19. Rule 2 2 When information is required to be disclosed 19. Rule 2 3 Information required to be disclosed by Intermediary 19. Rule 2 4 No obligation for the Intermediary to disclose 20. Rule 2 5 No obligation on Intermediary to disclose to the extent information has already been. disclosed 21, Rule 2 6 Reportable Taxpayer required to disclose in certain circumstances 21. Rule 2 7 Disclosure of Arrangements entered into after 29 October 2014 and before the effective date. of these rules 22,III Commentary 23,1 Definitions 24.
1 CRS Avoidance Arrangement 24,2 Opaque Offshore Structure 30. 3 Intermediary 33,2 Disclosure requirements 36, 3 Penalties and other mechanisms for dealing with non compliance 43. MDR FOR CRS AVOIDANCE ARRANGEMENTS AND OPAQUE OFFSHORE STRUCTURES OECD 2018. ABBREVIATIONS AND ACRONYMS 7,Abbreviations and acronyms. AEOI Automatic Exchange of Information,AML Anti Money Laundering. BEPS Base Erosion Profit Sharing,CFA Committee on Fiscal Affairs.
CRS Common Reporting Standard,EU European Union,FATCA Foreign Account Tax Compliance Act. FATF Financial Action Task Force,FI Financial Institution. G7 Group of seven,G20 Group of twenty,IT Information Technology. KYC Know Your Customer,MCAA Multilateral Competent Authority Agreement. MNE Multinational Enterprise,NFE Non Financial Entity.
OECD Organisation for Economic Co operation and Development. USD United States Dollars, MDR FOR CRS AVOIDANCE ARRANGEMENTS AND OPAQUE OFFSHORE STRUCTURES OECD 2018. I INTRODUCTION 9,I Introduction, 1 The purpose of these model mandatory disclosure rules is to provide tax administrations with. information on CRS Avoidance Arrangements and Opaque Offshore Structures including the users of. those Arrangements and Structures and those involved with their supply Information disclosed pursuant. to the application of these model rules can be used both for compliance purposes and to inform future tax. policy design These rules should also have a deterrent effect against the design marketing and use of. arrangements covered by the rules, 2 The model rules require an Intermediary or user of a CRS Avoidance Arrangement or Opaque. Offshore Structure to disclose certain information to its tax administration Where such information. relates to users that are resident in another jurisdiction it would be exchanged with the tax. administration s of that jurisdiction in accordance with the terms of the applicable international legal. instrument, 3 The mandatory disclosure rules do not affect the substantive provisions of a jurisdiction s CRS. Legislation or impact on any reporting outcomes under the CRS Rather these rules are information. gathering tools that seek to bolster the integrity of the CRS by deterring advisors and other intermediaries. from promoting certain schemes The rules seek to accomplish this by providing tax administrations and. policy makers with information on schemes their users and suppliers for use in compliance activities. exchange with treaty partners and tax policy design. 4 Consistent with the concepts on mandatory disclosure articulated in the BEPS Action 12 Report. the model rules are not limited to situations of non compliance with the tax law including the rules on. CRS reporting Thus a disclosure under the rules does not necessarily imply a violation of any tax rule. and will not always result in the tax administration taking compliance action in respect of a disclosed. Arrangement Equally the fact that a tax administration does not respond to a disclosure does not imply. any acceptance of the validity or tax treatment of the Arrangement by the tax administration. Jurisdictions implementing these model rules would need to take into account domestic specificities in. their own CRS Legislation and the interaction of these model rules with existing anti avoidance rules. MDR FOR CRS AVOIDANCE ARRANGEMENTS AND OPAQUE OFFSHORE STRUCTURES OECD 2018. 10 I INTRODUCTION,Key Elements, 5 While the BEPS Action 12 Report does not represent a minimum standard it provides a.
framework for mandatory disclosure rules that is based on international best practices and presents tax. administrations with options to address perceived risks The framework has five key elements in the. design of a mandatory disclosure regime, a A description of the Arrangements that are required to be disclosed i e the hallmarks of a. disclosable scheme, b A description of the persons required to disclose such Arrangements i e the Intermediaries. that are subject to reporting obligations under the rules. c A trigger for the imposition of a disclosure obligation i e when an obligation to disclose. crystallises under the rules and any exceptions from reporting. d A description of what information is required to be reported and. e Appropriate penalties or other mechanisms to address non compliance. These elements are reflected in the design of the model mandatory disclosure rules set out in this. document The first two elements the description of the hallmarks and the definition of Intermediary set. the boundaries of the reporting obligations under these model mandatory disclosure rules so that an. Arrangement that is a CRS Avoidance Arrangement or an Opaque Offshore Structure will be. required to be disclosed by any person that is an Intermediary in respect of that Arrangement or. 6 The definition of a CRS Avoidance Arrangement and an Opaque Offshore Structure is set out. in Rules 1 1 and 1 2 These definitions are given a broad scope in order to capture any type of. Arrangement that has the effect of circumventing CRS Legislation or not allowing the accurate. identification of the Beneficial Owners under an Opaque Offshore Structure An Arrangement or. Structure that fits within these hallmarks will only be required to be disclosed in the reporting. jurisdiction by the persons that are responsible for the design or marketing of that Arrangement or. Structure or persons who can reasonably be expected to know that the Arrangement meets the. description set out in those hallmarks i e an Intermediary as defined in Rule 1 3 Section 2 of the. model rules then sets out the mechanics for disclosure including a description of when and in what. circumstances an Intermediary is required to file a disclosure including any exceptions from reporting. and the information required to be reported, 7 The hallmark for a CRS Avoidance Arrangement captures any Arrangement where it is. reasonable to conclude that it has been designed to circumvent or has been marketed as or has the effect. of circumventing CRS Legislation This generic test is supplemented by specific hallmarks that. specifically identify known features of CRS Avoidance Arrangements These specific hallmarks have. MDR FOR CRS AVOIDANCE ARRANGEMENTS AND OPAQUE OFFSHORE STRUCTURES OECD 2018. I INTRODUCTION 11, been developed in light of the experiences of a number of tax administrations and in response to schemes. that have been disclosed to the OECD under the CRS disclosure facility. 8 The hallmark for Opaque Offshore Structures specifically targets Passive Offshore Vehicles. that are held through an Opaque Structure The purpose of this hallmark is to supplement the disclosure. rules for CRS Avoidance Arrangements and to capture Structures that would not ordinarily be subject to. CRS reporting such as holding structures that hold assets other than financial accounts e g real estate. 9 Like the hallmark for CRS Avoidance Arrangements the definition of Opaque Offshore. Structure has a generic element that tests whether the Structure has the effect of not allowing the accurate. identification of the Beneficial Owners and it also specifically identifies well recognised tax planning. techniques that can be used to achieve this outcome such as the use of undisclosed nominees. Definition of Intermediary and Timing of Disclosure Obligations. 10 Rule 1 3 defines who is an Intermediary and Rule 2 1 and 2 2 set out rules governing when that. Intermediary is required to make a disclosure under these rules Intermediaries are defined as those. persons responsible for the design or marketing of CRS Avoidance Arrangements and Opaque Offshore. Structures Promoters as well as those persons that provide assistance or advice with respect to the. design marketing implementation or organisation of that Arrangement or Structure Service. Providers By limiting the definition of Intermediary to Promoters and Service Providers the operation. of the model rules is limited to those Intermediaries Arrangements and Structures that are likely to. present the greatest risk from a compliance perspective. 11 The model mandatory disclosure rules only impose disclosure obligations on Intermediaries. that have a sufficient nexus with the reporting jurisdiction This will include an Intermediary operating. through a branch located in that jurisdiction as well as an Intermediary that is resident in managed or. controlled incorporated or established under the laws of that jurisdiction. 12 Under Rule 2 2 an Intermediary is required to file a disclosure in respect of a CRS Avoidance. Arrangements and Opaque Offshore Structures This publication contains the Model Mandatory Disclosure Rules for CRS Avoidance Arrangements and Opaque Offshore Structures The design of these model rules draws extensively on the best practice recommendations in the BEPS Action 12 Report while being specifically targeted at these types of arrangements and structures Part I gives an overview of

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