In this article, we’re going to share what CRS stands for in the banking world.
This article is part of a series covering banking basics, including both CRS countries & AEOI. If you would like to take a closer look at all of the CRS countries, you can click here now.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- CRS Stands For
- Who Needs to File CRS?
- CRS vs FATCA
- Frequently Asked Questions
- Ready to Open an Offshore Bank Account?
CRS Stands For:
CRS stands for “Common Reporting Standards”. These are standards that are imposed on financial institutions in participating countries. The intention of CRS is to fight tax evasion by ensuring taxable income is properly reported in countries of residency by the owners of international bank accounts.
CRS is an initiative of the OECD and forms an important part of the organization’s push for the Automatic Exchange of Information (AEOI) globally. This includes financial information related to accounts held at any financial institution in a participating country, including bank accounts, brokerage accounts, and accounts with asset managers firms.
Both personal information and bank account information, including:
Personal Information Shared via CRS
- Name
- Place and date of birth
- Country of residence
- Address
- Tax identification number
Bank Account Information Shared via CRS
- Account number
- Account balance
- Transaction information
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Who Needs to File CRS?
If you have a financial account in a participating country, your information will be shared on your behalf whether you like it or not. In other words, the meaning of CRS stands for a reporting requirement banks implement, not account holders,
That said, account holders, do need to self-certify their place of residence with financial institutions. This typically involves providing the country of residence, the corresponding tax residence number, and general information account information.
Anyone looking to open a bank account in a country that participates in CRS must complete the self-certification process. In other words, if you don’t want to self-certify, your account opening application will be denied.
CRS vs FATCA
The main difference between CRS and FATCA is that CRS applies to persons from CRS-participating countries while FATCA only applies to US persons. Additionally, while there are 109 countries that participate in CRS, only 94 countries participate in FATCA.
It’s also important to note that country-level information-sharing agreements are very common, although they do not result in the automatic exchange of information.
Frequently Asked Questions
Below are three of the most common questions that we receive from people asking what CRS stands for. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
What Is CRS in Banks?
CRS stands for “Common Reporting Standards” in the banking industry. These are reporting standards introduced by the OECD to help fight global tax evasion. That said, reporting does not involve the account holders. Financial institutions report on each client’s behalf.
How Does CRS Work?
CRS works by forcing financial institutions in participating countries to report account information on their clients. This includes a report with identifying information about the individual, including their country of tax residence, tax identification number, date and place of birth, and address. Of course, this also includes bank account information like account number, account balance, and transaction details.
What Is the Need for CRS?
CRS is seen as a solution for fighting tax evasion internationally. It does this by forcing international banks to share information about their clients with each client’s country of residence. This information is then used to confirm that the individual is correctly reporting their assets and taxable income accurately.
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