New Tax Reporting Requirement
As of 1 July, there’s been an introduction of a new tax regulation which requires the banks to report on your tax jurisdiction and could involve sharing data with OECD and participating countries. No doubt, this is another move to prevent tax evasion and money laundering. You can find more in the article below.
Automatic Exchange of Information (AEOI)
The Common Reporting Standard (CRS) will come into effect on 1 July 2017. It requires certain New Zealand Financial Institutions to confirm a customer’s country/jurisdiction(s) of tax residence and its corresponding Taxpayer Identification Number (TIN). If a TIN is not available for a particular country/jurisdiction then they may select a pre-defined reason for not providing a TIN. The collection of this information is referred to as a self-certification.
If a customer’s tax residence is located outside of New Zealand, the bank may be legally obliged to pass on information about them and their financial accounts to the Inland Revenue Department (IRD). Inland Revenue may then pass on this information to the relevant overseas tax authorities.
What is the Common Reporting Standard?
The CRS is a global standard for the collection and exchange of information between tax jurisdictions that New Zealand will adopt from 1 July 2017. Customers may be required to provide certain information regarding their residence for tax purposes. For some entities (such as trusts), this may include information from certain individuals associated with the entity, such as beneficial owners and trustees.
In some circumstances, the bank may also contact customers from time to time to confirm their tax residency and/or request additional documentation in support of their self-certification.
What this Means for You
You may be required to assist the bank in collecting information. All new customers from 1 July 2017 wanting to open a new account will need to provide information on their tax residency, including a self-certification.
Existing customers may be required to provide a self-certification of their tax residency. The bank will need to know if any customer’s tax residency changes.