During the last year, much has been said about the automatic exchange of financial information. You may have heard the topic Common Reporting Standard, or CRS, mentioned many times and some of you may have heard me on Kiss FM over the last few weeks talking about this very subject.
This is a very important legislation that affects all of us and you need to be aware of the ramifications for you personally and take steps to ensure that your financial circumstances are fully compliant.
We have been preparing for the impact of this legislation for some time; informing clients that as of 2016 all financial institutions are required to report.
How did this come about and what exactly is CRS?
The Common Reporting Standard was developed in response to a G20 request and approved by the OECD (Organisation for Economic Co-operation and Development) Council in 2014, calling on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis.
The intention is to tackle tax evasion, corruption, terrorist financing, money laundering and, therefore, improve tax compliance by both individuals and corporations.
What does this mean to those of you living in Portugal?
A reportable individual (or entity) is someone who is identified as tax resident in a reportable country. In certain circumstances, the controlling persons of certain types of entities are also within the scope of CRS.
If you hold bank accounts, investments, pensions or even life insurances in another reportable country, the Portuguese tax authorities will automatically receive information on those worldwide assets and Portugal will also report in 2017 information related to the year 2016.
This information will include your name, address, tax identification number and date and place of birth. Also information concerning the actual account, such as account number, balance and amounts paid into the account arising from interests, dividends, proceeds and so on. It is very important to note that even if the account has since been closed, it will still be reported on.
What should you do next?
Review your current tax and financial planning arrangements now. You should have in place a financial structure that is both tax efficient and approved in Portugal or in your country of residency.
Make sure you are a tax resident in one country and that those tax authorities have your correct address and details. You need to be declaring your worldwide assets in your country of residency.
‘Offshore’ and ‘Fiscal Structures’ are a thing of the past in the vast majority of locations – information on what you hold and where you hold it now need to be reported – there are no clever loopholes allowing you to avoid disclosing your assets.
Peace of mind is key to a better living, so get your finances in order.
By Manuela Robinson
Manuela Robinson is an International Financial Adviser at Blacktower Financial Management (International) Limited with office in Quinta do Lago and Cascais.
289 355685 | www.blacktowerfm.com
Blacktower Financial Management (International) Limited is licensed by the Gibraltar Financial Services Commission. Licence 00805B. Blacktower Financial Management Limited is authorised and regulated in the UK by the Financial Services Authority.