As a mean to help counter tax evasion on a global level, the OECD and G20 have worked together to develop a global initiative on the Automatic Exchange of Information in Tax Matters (“AEOI”), also known as the “Common Reporting Standard” or “CRS”.
The focus of the AEOI is the exchange of information on a cross-border basis between tax authorities, and will potentially affect all accounts held by non-residents (i.e. the AEOI will affect accounts held by both individuals and entities, including trusts, foundations and partnerships). Where entities are concerned, it is necessary to determine their classification for the AEOI purposes (being either a Financial Institution, Active Non-Financial Entity or Passive Non-Financial Entity), according to strict criteria laid down in the AEOI rules. In some cases, it may be necessary to gather tax information on the Controlling Persons behind the entity.
The AEOI draws upon international anti-money laundering standards, and sets out strict procedures which must be followed by financial institutions in order to gather, and where necessary report, this tax information to partner jurisdictions.
The reporting of information under the AEOI is generally not applicable if you are tax resident in the same country as the Bank (i.e. Switzerland). This does not mean that the Bank does not have an obligation to collect the information, only that the information will not be reported.