Seasons change and so does CRS: the OECD publishes public consultation document on amendments to the Common Reporting Standard - Tax and Legal blog


Nearly eight years after the adoption of the Common Reporting Standard (CRS), the Organisation for Economic Co-operation and Development (OECD) have done a bit of spring cleaning and published a public consultation document on a Crypto-Asset Reporting Framework (CARF) and proposed amendments to the CRS.

Recent development in technology and products in the financial markets have led to a shift in practices around payments and investment. In particular, Crypto-Assets do not require the involvement of traditional financial intermediaries for their holding or transfer. In addition, actors that are not covered by the CRS are able to offer electronic storage and payment functions equivalent to traditional bank accounts via digital money products, which includes crypto-based and other electronic money products as well as Central Bank Digital Currencies (CBDCs). This led the OECD to propose these revisions, which seek to modernize the tax transparency instruments available to tax authorities.

This blog is the first of a two-part series and describes selected key provisions of the proposed changes in the CRS, which broadly have two objectives: (1) adding new digital financial products to the scope of CRS, as they may constitute an alternative to evade CRS reporting, and (2) improving the due diligence process and reporting outcome.

The second part of this series covering the Crypto-Asset Reporting Framework will follow in a separate blog.

1. Covering new digital financial products

a. Digital money product

From a customer’s perspective, certain e-money products, as well as CBDCs representing a digital fiat currency issued by a Central Bank, can fulfil the same function as a traditional bank account. The OECD propose to include such products in the scope of CRS to ensure that these are reported consistently with other bank accounts. The proposal includes the following amendments:

  • The definition of Financial Asset would be expanded to include Relevant Crypto Assets and derivatives referencing these
  • the definitions of these assets, including Specified Electronic Money Products and CBDCs would be added into the CRS
  • the definition of Depository Institution would be expanded to include e-money providers that are relevant from a CRS perspective by virtue of holding Specified Electronic Money Products
  • the definition of Depository Account would be amended to include accounts that hold CBDCs and Specified Electronic Money Products for customers
  • the definition of Investment Entity would be modified to include Relevant Crypto-Assets in both the relevant activities and gross income tests
  • the definition of Non-reporting Financial Institutions (FI) would not apply to a Central Bank when it holds CBDCs on behalf of individuals or Non-Financial Entities
  • two new categories of Excluded Accounts would be added: Specified Electronic Money Products whose value does not exceed a certain de-minimis amount and Specified Electronic Money Products that are created solely to facilitate a funds transfer pursuant to instructions of a customer and that cannot be used to store value.

2. Improving due diligence and reporting outcome

a. Expansion of the reporting requirements in respect of Account Holders, Controlling Persons and their Financial Accounts

The proposed amendments would require FIs to include additional elements in their CRS reporting. The additional data would allow Tax Authorities to have a better understanding of the information they receive, facilitating the use of the data received for tax compliance purposes.

The proposed additional elements are:

  • The controlling person’s role, which is currently only optional, would become a mandatory field. This information is helpful for Tax Authorities to understand ownership and control structures, and whether the income reported must be allocated to the Controlling Person.
  • The classification of the account as either a Preexisting Account or a New Account, as well as whether a valid self-certification has been obtained.
  • The information that the account is a joint account and the number of joint Account Holders. This amendment would allow Tax Authorities to assess whether the income and balance reported for joint accounts must be attributed in full to each Account Holder, or if it should be split between the holders.
  • The classification of the reported Financial Account as either a Depository Account, Custodial Account, Equity and debt Interest, Cash Value Insurance Contract, or annuity contract.

b. Reporting in respect of dual-resident Account Holders

The current CRS Commentary indicates that an entity or individual Account Holder that is resident for tax purposes in two or more jurisdictions can, in the context of the self-certification process, rely on tie-breaker rules included in applicable tax conventions to solve cases of double residence and determine their tax residence.

The proposed amendments would require an Account Holder with more than one tax residence to indicate all such jurisdictions in their self-certification and require the FI to treat such Account Holder as being tax resident in all identified jurisdictions. In addition, the reference to paragraph 23 stating “Reporting Financial Institutions are not expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification.”, was deleted.

The OECD indicates it is still considering whether an exception to this new rule should apply where the Account Holder provides the Reporting Financial Institution with government-issued documentation to resolve cases of dual residence under applicable tax treaties.

The rationale behind this change indicated in the OECD’s document is that relying on tie-breaker rules may lead to the FI prematurely treating the Account Holder as tax resident in a single jurisdiction, and therefore not reporting such Account Holder to the other jurisdiction(s).

c. Reflecting Government Verification Services within the CRS due diligence procedures

In order to reflect the evolution of technology, the amended CRS would allow FIs to rely on so-called Government Verification Services (GVS) during their due diligence procedures, to facilitate Account Holder or Controlling Person documentation.

GVS can allow FIs to obtain a direct confirmation from a taxpayer’s competent tax administration with respect to their identity and tax residency. Such confirmation can be in the form of an IT-token or other unique identifier. In this context, the confirmation of identity or tax residence obtained via GVS or similar IT-driven process will be recognised as a functional equivalent to a TIN.

d. Integrating CBI/RBI guidance within the CRS

The proposed amendments would include in the CRS the explanatory guidance published by the OECD in October 2018 around the misuse of certain citizenship and residence investment (CBI/RBI) schemes. Such schemes may allow foreign individuals to circumvent CRS by granting them a citizenship, temporary or permanent residence in exchange for either a flat fee or local investments.

FIs cannot rely on a self-certification or Documentary Evidence if they know or have reason to know that such document is incorrect or unreliable. The proposed amendments would add that, when confirming the reasonableness of a self-certification, an FI should take into consideration the information that the OECD publishes on its website around CBI/RBI schemes and that, in case of doubt, the FI should not accept such self-certification until it has taken further measures to identify the tax residence(s) of such person, including raising further questions. Examples of such questions would be included in the Commentary as well.

e. Transitional measures

FIs will need time to operationalize the proposed amendments and the OECD document proposes transitional measures to provide FIs enough time to include such changes in their processes.

In particular, the inclusion of digital money products in the scope of CRS would subject new entities to CRS reporting obligations, and existing FIs would see an increase in Reportable Accounts with respect to their digital money product offerings. The OECD therefore proposes to include the same transitional measure as when CRS was originally implemented. Accordingly, accounts that would become Financial Accounts solely because of these amendments and that were held by FIs before the effective date of the revised CRS would be treated as Preexisting Accounts and accounts opened after the effective date would be treated as New Accounts.

In addition, not all FIs currently collect the role of Controlling Persons, as such element is optional. The changes would therefore include a two-year transitional period during which Reporting FIs would need to collect such information with respect their Financial Accounts maintained prior to the effective date of the revised CRS, only in cases where such information is available in their electronically searchable data.

f. Other proposed amendments

In addition to the above points, the OECD document provides the following amendments:

  • Commentary around duplicative reporting on Financial Assets in crypto-form
  • Conditions under which an FI can rely on AML/KYC Procedures for determining Controlling Persons
  • Exceptional due diligence procedure for cases where a valid self-certification was not obtained, in order to ensure reporting with respect to such accounts
  • Qualification of certain capital contribution accounts as Excluded Accounts
  • Elaboration on the notions of customer and business in the context of Investment Entities
  • Look-through requirements in respect of Controlling Persons of publicly traded Entities
  • Incorporating a number of the FAQs directly into the Commentary

Deloitte's View

The impact of the proposed revised CRS will be unique depending on the implementing jurisdiction and the FI’s specific situation. History has shown that jurisdictions, to a certain degree, deviated in the practical implementation and the timing. Generally, we expect that FIs will need to review their policies and procedures to implement these changes because the entity classifications, account definitions, due diligence and reporting procedures are all in scope of the proposed changes. Global FIs that implemented CRS should monitor local implementations and run a coordinated program to ensure consistency. Whereas entities newly qualifying as FIs should prepare for a full implementation program.

In the following bullets we discuss our view on some of the more relevant changes:

  • Coverage of new digital financial products: The introduction of the proposed rules regarding e-money products and Crypto Assets represents a significant change. Entities that so far were not FIs are now pulled into the definition and “accounts” that did not fall within the Financial Account definition may now be in scope. For the entities affected this is a game-changing event. Even if the OECD considers excluding “low-risk” e-money accounts, the proposed amendments will still affect many entities that will newly need to implement due diligence and/or reporting procedures. The required effort should therefore not be underestimated and the industry should use the opportunity to provide input to the consultation document.
  • New data elements to be included in the reporting: The OECD will have to modify the XML Schema to allow for the new elements and jurisdictions that use their own XML Schema will have to update it as well. The addition of new reporting data will also require FIs to analyse their current procedures on how they obtain and store this data to ensure they are able to extract it for reporting purposes. We note that in a recent court case, a French Bank was ordered to pay damages following the reporting of inaccurate account holder data under the Foreign Account Tax Compliance Act (FATCA). The court ruled that the Bank had an obligation to be vigilant regarding the accuracy of the data reported given the fact that the plaintiff’s personal data was internationally transferred to the US. The Bank has been ordered to take any necessary steps to ensure the deletion of such personal data by the US tax authorities under the General Data Protection Regulation (GDPR). It therefore appears that FIs will likely face further complexities as they seek to comply with the OECD expansion of reportable data in light of other regulations around data protection.
  • Elimination of access to tie breaker rules: The initial inclusion of the tie breaker rules seemed to serve the purpose of reducing unnecessary reporting and limit reporting as much as possible to the tax authorities with a valid interest in the data. The OECD is now requiring reporting to all jurisdictions independent of potentially applicable tie breakers. FIs have faced the challenge of balancing (i) reliance on tie breaker rules, (ii) the fact that FIs were not expected to carry out an independent legal analysis of relevant tax laws to confirm the reasonableness of a self-certification, and (iii) management of risk. The new dual residency reporting requirement combined with the new rules in relation to RBI/CBI leads us to conclude the OECD may perceive a potential loophole or a risk of underreporting in this area. Whether the dual residence reporting solution is the ideal instrument to close a potential loophole remains to be seen. The proposed option to provide the Reporting Financial Institution with government-issued documentation to resolve cases of dual residence under applicable tax treaties in combination with the RBI/CBI rules could be a good instrument to further enhance tax transparency. At the same time millions of additional reports can be expected that will cause more effort on the part of FIs to report and Account Holders to respond to tax authority queries with potentially no additional value where tie breakers are applicable.
  • Utilisation of GVS during due diligence procedures: it is not clear from the current text of the OECD document whether these services could be relied upon only with regards to TIN or also for other elements. The proposed amendments would be in the Commentary on Section VIII, Subparagraph E(5) which relates to TIN. However, the explanatory text of the OECD document and the proposed amendments to the CRS itself refer to confirmation around both tax residency and identity of a taxpayer.
  • Scope of transitional measures: The transitional measures provide for a two-year timeframe for FIs to implement the revised CRS, but only explicitly mention some elements. It is not clear how quickly relevant jurisdictions will implement and whether each jurisdiction will provide its own transitional rules in more detail. This would on the one hand alleviate implementation and on the other hand increase complexity for global FIs seeking to run consolidated change programs.
  • Other proposed amendments: The qualification of certain capital contributions as excluded accounts is particularly relevant in Switzerland. Notably, these are already excluded under article 9 of the Ordinance on the International Automatic Exchange of Information in Tax Matters (AEOI Ordinance). It will be interesting to see whether the proposed limitations (e.g., subject to regulation, matter of law, max 12 months, etc.) to the use of capital contribution accounts to qualify as an excluded account as currently proposed by the OECD will be sufficient to satisfy the industry’s requests and can fully align rules and practice.  

As mentioned above, the amendments published by the OECD are part of a public consultation. Comments can be submitted until 29 April 2022 by email (in Word format) at the following email address:  [email protected].

Please note that all written comments will be made publicly available on the OECD website. A public consultation meeting will also be held at the end of May 2022.

Based on input received, the OECD plan to finalise the rules and commentary, as well as develop exchange instruments and the technical solution needed to support reporting and exchange pursuant to CARF and CRS. The OECD’s intention is to report back on CARF and the amended CRS in the October 2022 meeting of the G20.

FIs need to quickly think about whether they want to reply to the consultation document directly or as a broader group consolidating input via their relevant industry associations.

If you would like to discuss more on this topic, please do reach out to our key contacts below.

Key contacts

Brandi Caruso

Brandi Caruso - Partner, Financial Services Tax & Legal

Brandi heads Deloitte’s Financial Services Tax team in Switzerland and Liechtenstein. She has extensive expertise in advising the Swiss financial services industry on the implementation of U.S. and international transparency regimes (including QI, FATCA, Section 871(m), CRS, MDR and DAC6). Brandi leads the Financial Services Tax team efforts related to innovative technology solutions. Brandi is a U.S. Certified Public Accountant and has 20 years of experience with Deloitte and has worked in London and San Diego.



Michael Grebe - Director, Financial Services Tax

Michael is a Director in the Financial Services Tax practice. He advises banks, trust companies, and insurers in relation to the interpretation and implementation of the global transparency related regimes. He has over ten years of experience in the financial industry covering a broad spectrum ranging from Process- over Project- to Product- Management. Prior to joining Deloitte, he led the FATCA and CRS implementation project for a global financial institution.


Karim Schubiger_110x110

Karim Schubiger – Director, Financial Services Tax 

Karim leads the Tax Transparency team in the Suisse Romande and Ticino markets within the Financial Services Tax & Legal practice, responsible for services related to QI, FATCA, CRS, 871(m) and DAC6. He is a technical advisor and subject matter expert to financial institutions in the banking, trust, and insurance sectors. Prior to joining Deloitte, Karim worked for eight years in support teams of Swiss banks, in particular in areas such as operations, project and change management as well as operational taxes.


Atila Demiraj

Atila Demiraj - Assistant Manager, Financial Services Tax

Atila is an Assistant Manager in our Financial Services Tax team in Zurich. She has experience in various tax-related projects, focusing on AEI/CRS, FATCA and QI Regulatory topics. She holds a master degree in Business Economics from the University of Zurich.


Camille Von Roten 06 (3)

Camille von Roten - Assistant Manager

Camille is an Assistant Manager working in the Financial Services Tax team. She provides QI, FATCA and CRS advice and expertise to global, regional and private banks as well as banking industry groups in Switzerland. Camille holds a Master of Law and Economics from Lausanne University, Switzerland. 



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