Understanding the common reporting standard : implications and the way forward

Abstract

The main aim of the research was to evaluate OECD’s Common Reporting Standard (CRS) and investigate its implementation in the time frame given to Malta as a jurisdiction by the EU. CRS’s main goal is to reduce and eventually eliminate tax evasion. It would do so by making sure all Financial Institutions (FIs) have the necessary information from clients in order to produce reports in time. Consecutively, this would lead to the Automatic Exchange of Information when necessary between different jurisdictions. In the research done, the Foreign Accounting Tax Compliance Act (FATCA), was also reviewed since CRS was built on FATCA but on a global scale. To help verify research, interviews were conducted with participants of various Financial Institutions. Their option regarding both FATCA and CRS were then evaluated. The study concluded that even though CRS is still in its induction stage participants are optimistic that CRS will strive with its intention. FATCA was the foundation which helped CRS develop awareness and preparation. This study supports the general idea of participants that CRS was implemented in too short a time frame, creating limitations for FIs. These institutions, however managed to overcome the difficulties to implement such a vast standard within a limited time period.