Circular on What Should be Included in CRS Reporting

§Passage 1

Common Reporting Standard

(“CRS”) What should be included in CRS reporting?

Background to the CRS

The Common Reporting Standard (“CRS”) for Automatic Exchange of Information has been developed by the OECD with an intention to cooperate in the global effort towards tax transparency.The UAE has signed the Convention on Mutual Administrative Assistance in Tax Matters (“Multilateral Convention”), the Declaration of Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information

(“MCAA”), and the Unilateral Declaration in April 2017.

Reporting Financial Institutions (“RFIs”) that maintain financial accounts are required to collect and report information on an annual basis related to CRS reportable accounts which is then exchanged with CRS exchange partner jurisdictions. The collection of account information aims to identify the jurisdictions(s) of tax residence for account holders and certain financial account information and to report this information to CRS exchange partner jurisdictions on an annual basis.

Impact of the CRS

Under the CRS, UAE RFIs are required to apply due diligence procedures and collect documentation to identify

whether a financial account maintained by the UAE RFI is a CRS Reportable Account. As a result, individual and entity account holders are required to provide completed CRS self-certification forms and/or documentary evidence when requested by UAE RFIs, such as banks, upon account opening. The CRS self-certification form typically requires that the individual account holder declares their name, residence address, jurisdiction(s) of tax residence and TIN(s) (where applicable). Entity account holders are also required to disclose their name, address, jurisdiction(s) of tax residence and TIN(s) (where applicable) as well as information on Controlling Person(s) for certain types of entities.

It is the responsibility of UAE RFIs to ensure effective implementation of the CRS. UAE RFIs are required to ensure that they have effective systems in place to accurately identify CRS Reportable Accounts and to ensure that the information reported for CRS purposes meets the data quality requirements.

Purpose of this circular

● Provide guidance to UAE RFIs to determine mechanisms to ensure the data submitted is in line with the CRS reporting requirements, particularly information relating to :

○ Tax Identification Numbers (TINs);

○ Date of birth;

○ First name and last name; and ○ Address.

§Passage 2

Disclaimer - the terms included in this document are as defined by the OECD Standard for Automatic Exchange of Financial Account Information in Tax Matters. This document is designed to provide entities in the UAE with information to enable them to assess their obligations under the CRS and is not intended to constitute legal or tax advice. CRS domestic legislation shall take precedence over the information contained in this document. Information contained in this document is not a substitute for (i) reviewing and considering the relevant applicable laws in their entirety and in detail; and (ii) obtaining appropriate legal and tax advice. You should consider obtaining legal and tax advice as required to determine if you are an RFI.

Tax Identification Number

Date of Birth (TIN)

Under the CRS, the TIN must be collected and reported, Under the CRS, the date of birth must be reported for all where possible, for all Reportable Accounts where individual Reportable Persons (for both Account Holders Account Holders are tax resident in jurisdictions that and Controlling Person(s)).

automatically issue TINs to residents for tax purposes, New Accounts (Financial Accounts opened on or after 1 including individual and entity accounts and Controlling

January 2017) Persons, where applicable.

An RFI is required to collect the date of birth of the New Accounts (Financial Accounts opened on or after 1 Account Holder as part of the onboarding process upon January 2017) account opening.

UAE RFIs are required to collect TIN(s) for all New A CRS self-certification must contain the date of birth of Accounts as part of the onboarding process upon account the Account Holder in order for it to be valid. The RFI opening. Exceptions apply where a TIN is not issued by must confirm the validity and reasonableness upon the jurisdiction where the Account Holder is resident or if collection of the CRS self-certification form and cross the domestic law of the relevant jurisdiction does not check with documentary evidence that a correct date of require the collection of a TIN issued by such jurisdiction. birth has been provided.

Pre-existing Accounts (Financial Accounts opened Pre-existing Accounts (Financial Accounts opened before 1 January 2017) before 1 January 2017) An RFI is required to report all TINs. Where the TIN is not An RFI is required to report the date of birth in all cases. maintained for CRS Reportable Accounts by the RFI, the Where the date of birth is not maintained by the RFI, the RFI must use and demonstrate reasonable efforts to RFI must demonstrate that it has taken reasonable efforts obtain the TIN from Account Holders and/or Controlling to obtain the date of birth and document this approach. Persons and document this approach.

Quality of TIN data collected UAE RFIs should have effective systems in place to identify reportable accounts accurately and to submit accurate information in respect of TINs.

In reviewing TIN information provided by Account Holders and/or Controlling Persons of Account Holders, RFIs must consult the following guidance issued by the OECD to ensure that the structure and format of the TINs being collected and reported by the RFI are in line with the formats prescribed by the jurisdiction in which the Account Holder and/or Controlling Person claims to be tax resident:

https://www.oecd.org/tax/automatic-exchange/crs- implementation-and-assistance/tax-identification- numbers/

§Passage 3

First name and last name Address

The CRS requires the completion of the data elements for The CRS requires that the address of the account holder is

first name and last name when reporting information provided in order to report the account. related to individual Account Holders or controlling persons. In certain cases CRS exchange partner This data element is the permanent residence address jurisdictions are unable to identify the individual and e.g. of the individual account holder. If the RFI does not controlling person on the basis of the name reported by have a permanent residence address on file for the an RFI. individual, then the address is the mailing address used

by the RFI to contact the individual Account Holder when In order to enhance the quality of the data, the RFI should the report is compiled.

compare the first name and last name provided by the Account Holder against the name as per the official In order to enhance the quality of the data shared the documentation submitted by the Account Holder. address should be provided in sufficient detail to allow

the CRS exchange partner jurisdiction to be able to If an individual’s legal name is a mononym or single identify the Account Holder for which the information is name, the first name data element should be completed being reported.

as “NFN” (No First Name) and the last name field should be completed with the Account Holder’s mononym. Where the RFI is in possession of the permanent address

of the account holder, the RFI should report such address for CRS reporting purposes.

Disclaimer - the terms included in this document are as defined by the OECD Standard for Automatic Exchange of Financial Account Information in Tax Matters. This document is designed to provide entities in the UAE with information to enable them to assess their obligations under the CRS and is not intended to constitute legal or tax advice. CRS domestic legislation shall take precedence over the information contained in this document. Information contained in this document is not a substitute for (i) reviewing and considering the relevant applicable laws in their entirety and in detail; and (ii) obtaining appropriate legal and tax advice. You should consider obtaining legal and tax advice as required to determine if you are an RFI.