1. What is the Common Reporting Standard?
The Common Reporting Standard (CRS) is a new information gathering and reporting requirement for financial institutions in participating countries, to help fight against tax evasion and protect the integrity of tax systems. For the complete list of participating countries, please refer to OECD website http://www.oecd.org/tax/automatic-exchange/common-reporting-standard
2. Who is reportable?
The CRS seeks to establish the tax residency of customers, therefore, financial institutions are required to identify customers who appear to be tax resident outside of the country where they hold their accounts and products, and report certain information to the local tax authority. The local tax authority may then share that information with the tax authority where the customer is tax resident.
3. Why are you asking me for my jurisdiction(s) of tax residency?
Under the CRS, tax authorities require financial institutions such as ADIB to collect and report certain information relating to their customers' tax residency status. If you open a new bank account, invest in new financial products or change your circumstances in some way, we will ask you to certify a number of details about yourself. This process is called "self-certification" and we are required to collect this information under the CRS.
4. How is my/our tax residence defined?
For individuals, tax residence typically refers to any jurisdiction where customers are liable to pay income taxes or have an obligation to file their tax returns. This can be determined by where the individual works or actually lives. However, there are other contributing factors that are based on each jurisdiction's tax residency rules. Therefore, this will depend on where you live and your circumstances. Please contact a professional tax advisor or check the OECD website for more information on how to determine your tax residency, as ADIB cannot give tax advice.
5. How often do we need to provide information under the CRS?
Information needs to be provided once. The customer is required to provide an updated form, in case of change in customer circumstances which may indicate a change in tax residency status. Customers are encouraged to update bank records accordingly. In addition, Abu Dhabi Islamic Bank may ask for updated information as and when deemed necessary.
6. What if a customer does not have a Tax Identification Number (TIN)?
There is a possibility that certain countries do not issue Tax Identification Numbers. In such a case, a customer is required to provide details as to why it has no TIN in the self-certification. Jurisdictional guidance on TINs (or functional equivalents) can be found on the OECD Website.
7. What information ADIB will request customers to provide and report to local tax authority?
Some of the key information required to be collected and reported to the tax authorities, includes:
- Jurisdiction(s) of tax residence
- Date of birth
- Place of birth
- Name of the Reporting Financial Institution
- Account number
- Account balance
- Gross amount paid to the account in a year (Profit, dividends, other income)
- Gross proceeds paid or credited to the account
8. Will ADIB share my data with other parties?
ADIB is obligated to share the information with its local tax authority (or equivalent) who will then share the information with other tax authorities where the customer is a resident for tax purposes.
9. Will ADIB respect my data privacy?
ADIB is subject to strict confidentiality requirements and data safeguards as outlined under the local law. As per regulatory requirements, the information is only exchanged with the tax authorities of the relevant country.
10. What will happen if I do not provide the required information?
CRS is a mandatory requirement as mandated by the concerned UAE authority In case you do not want to provide the required information then we will not be able to proceed with your request for banking with ADIB.
11. Can the guardian provide the CRS self-certification on behalf of the minor in case of Minor accounts? And will the guardian be reported under the CRS?
The CRS self-certification form will be required for the minor account holder only, however, the guardian can provide the certification on behalf of the minor. The guardian will be only subject to documentation and reporting if he/she maintains a separate account with Abu Dhabi Islamic Bank and he/she is a tax resident in one or more of the participating jurisdictions.
12. In the case of joint accounts, is the CRS form mandatory for all account holders?
Yes. Each joint account holder will need to provide a separate CRS self-certification form.
13. If the account is managed by a Power of Attorney holder, Will the POA holder provide the CRS self-certification on behalf of the client? And will the POA holder be reported under the CRS?
The POA holder can provide the certification on behalf of the account holder. However, the CRS self-certification form will be required for the account holder only. The POA holder will be only subject to documentation and reporting if he/she maintains a separate account with Abu Dhabi Islamic Bank and he/she is a tax resident in one or more of the participating jurisdictions.
14. If I have already given my consent to share the information under FATCA, why do I need to give it again?
Even if you have already provided information under FATCA, you may still need to provide additional information under CRS, as FATCA is restricted to U.S. customers and CRS focuses on tax residents of participating jurisdictions.
15. Is the CRS form mandatory for all customers like US nationals and nationals of countries not participating in the CRS?
The tax residency status of all customers should be identified Although customers may be resident in the US, they may also be tax resident in other jurisdictions.
16. Will the change in the residency status impact the reporting (i.e. non-Resident becomes resident, cancellation of residency status of an existing resident)?
Yes. It is clearly stated in the certification that the customer will advise Abu Dhabi Islamic Bank about the change of his tax residency status or any other information provided in the form within 30 days and will provide an updated self-certification within 90 days.
17. If I have an existing relationship with another branch of Abu Dhabi Islamic Bank in a different jurisdiction, shall I provide separate CRS self-certification forms for each branch?
Yes. Two separate forms will be required.
18. Where can I find further information and advice?
For further information on your tax residency, please refer to the rules governing tax residence that have been published by each national tax authority. You can also find out more information at the OECD website http://www.oecd.org/tax/automatic-exchange/common-reporting-standard
The information contained herein does not constitute a tax/legal advice. For further information, please refer to your local regulations, OECD website, or your tax/legal advisor.