In September 2014, the Government announced that Australia would implement the OECD’s Common Reporting Standard (CRS) for the automatic exchange of financial account information.
The CRS tackles and deters cross-border tax evasion by establishing a common international standard for financial institutions to identify and report information about the financial accounts of foreign residents to their local tax authority and for tax authorities to exchange this information.
Australia signed the CRS Multilateral Competent Authority Agreement (MCAA) on 3 June 2015. The MCAA enables CRS information to be exchanged between countries’ tax authorities, provided legislation requiring financial institutions to identify and report the information and administrative arrangements for the exchange of information between tax authorities are in place. This draft legislation is designed to establish the legislative requirements for Australian financial institutions.
The draft legislation adopts meanings and concepts used in the CRS and Commentaries and gives effect to particular matters that the CRS allows implementing jurisdictions to specify. The Commentaries provide additional information on how financial institutions should apply the due diligence procedures to ensure consistency across jurisdictions. The CRS and its Commentaries are available on the OECD’s website at Standard for Automatic Exchange of Financial Account Information in Tax Matters.