OECD: Common Reporting Standard. Are you ready? INTAX Expo UAE 2016

Transcription

1

2 OECD: Common Reporting Standard. Are you ready? by Eesh Aggarwal FCA TEP INTAX Expo UAE 2016

3 1 Who are we? 2 CRS privacy invasion 3 Case studies 4 CRS weaknesses

4 Azure Consultants AREAS OF PRACTICE (since 1993): Offshore Company Formation International Tax Planning, Tax Law UK VAT registration Fiduciary & Trustee Audit & Accounting Wealth Management Team of specialists in the bespoke design and management of legal and financial structures to protect and grow your wealth

5 Azure Consultants WORLDWIDE OFFICES:

6 Eesh Aggarwal UK chartered accountant, registered auditor, licensed trustee; Over 20 years experience in UK/International accounts and tax planning; Lectured at LSE, ICSA, Moscow Institute of Risk Management Clients range from start-up entrepreneurs to ultrahigh net worth individuals and their related businesses. United Kingdom Mauritius Cyprus

7 1 Who are we? 2 CRS privacy invasion 3 Case studies 4 CRS weaknesses

8 The Objective of CRS TO ERADICATE TAX EVASION by forcing Automatic Exchange of Information (AEOI)

9 Offshore Problem Offshore bank accounts have become common by means of: Internet banking Cash cards Investments Key problems are: Strict privacy laws Tax evasion possible

10 Pre-AEOI attack Tax treaty access Anti money laundering Tax Information Exchange Agreements (TIEA) Problems Individual enquiry basis Slow Expensive

11 AEOI attack #1 - FATCA History Target US taxpayers with overseas monies. Assumed massive tax evasion Action Every financial institution globally is forced to register and report US monies. Fear of 30% withholding tax.

12 AEOI attack #2 - CRS Identification and documentation Reporting Exchange of information Account Holders Entity Reporting Financial Institutions Controlling Person Entity Domestic Tax Authorities Foreign tax authorities in countries of account holders and controlling persons

13 What is reported? REPORTABLE Financial Accounts Bank accounts Insurance savings Loans Financial Assets Securities Shares in underlying companies NOT REPORTABLE Non-Financial Assets Precious metals Art Real estate (no loans) Cars, yachts + airplanes

14 Who will report? DEPOSITORY (all) e.g. Banks Action Every financial institution globally is forced to register and report US monies. Fear INVESTMENT of 30% withholding tax. ENTITIES (> 50%) e.g. funds, trusts, trustees, CSP? CUSTODIAL (>20%) e.g. holding companies, CSP? INSURANCE (savings) e.g. life insurance companies

15 Which account holders are reported? ENTITIES INDIVIDUALS CRS tax resident entities Active entities are not reported All entities with CRS resident controlling person(s) Shareholders UBO s Partners Owners CRS tax residents

16 CRS report contents Entities Individuals & Entities detailed Account Information Individuals Companies Trusts Foundations Controlling persons of passive NFEs Account balances 31 December Interest Dividends Insurance contracts Sales proceeds from financial assets Any accounts closed

17 When? Entities Individuals & Entities detailed Account Information

18 1 Who are we? 2 CRS comes in every house 3 Case studies 4 CRS weaknesses

19 Case study #1 Individual with overseas bank account Entities

20 Case study #2 Company with overseas bank accounts (nominees) Entities Account Information

21 Case study #3 Trust with underlying companies Entities Account Information

22 1 Who are we 2 CRS privacy invasion 3 Case studies 4 CRS weaknesses

23 CRS weaknesses Non standard AEOI legal agreement 1 Account Information 2 3 War, sanctions, political pressure etc.

24 CRS weaknesses SIMILAR TO FATCA: Entities Unprecedented costs > US$ 1 trillion? No costs to US based banks and institutions! Account Information Invasion of foreign privacy laws Increased cost pressure on tax havens Big business and trading entities exempt Massive costs for minimal benefit!

25 How to bypass the CRS Change residency Close bank accounts Open non-crs accounts Hawala Non-financial assets Repatriate money back home Entities Account Information

26 The Future Roll the dice Entities Tracking of wealth of CRS residents Freezing, confiscation Innovative new taxes to seize offshore wealth

27 Conclusion Ideology trumps pragmatism Missing the target Jurassic park nature will find a way

28 $300 * Special offer during conference only *Note: Standard price $449

29