CRS: Cayman Islands & Brazil Time to Plan for 2018 Expanded Reporting
Updated: Mar 2
CRS placed a tremendous burden on financial institutions (FIs) during the 2017 reporting season. This burden will only increase during the 2018 reporting season.
FIs should have already taken steps to ensure due diligence is underway for those jurisdictions with a January 1, 2017 due diligence requirement. Now is also the time to ensure that employees / third party service providers at the back end of the the actual reporting process are made aware of the increased reporting to ensure they are prepared for 2018.
Increased Reporting in 2017 Participating Jurisdictions
Jurisdictions such as the Cayman Islands required CRS reporting in 2017. Cayman Islands FIs had to report on certain account holders resident in Participating Jurisdictions. Starting in the 2018 reporting season the number of Participating Jurisdictions is increasing. This means that FIs who already reported during 2017 must expand their reporting to cover account holders resident in an expanded list of jurisdictions.
The Cayman Islands list of 2018 Reportable Jurisdictions is an example of the increased reporting on account holders that must be undertaken for the 2018 CRS reporting season.
[Barbados, Greenland and Niue which were on the Cayman Islands’ 2017 Reportable Jurisdictions list deferred their CRS reporting participation from 2017 to 2018.]
New Reporting by 2018 Participating Jurisdictions
The flip side of this expansion of Reportable Jurisdictions is that more FIs must undertake reporting. There is a long list of jurisdictions which have agreed to participate in CRS reporting next spring.
Pattern of Reporting Deadline Extensions
In each of the three years of FATCA, CDOT and CRS reporting, there has been a pattern of portal registration and/or reporting deadline extensions. These extensions were understandable because the tax authority in some jurisdictions was implementing a new reporting regime in each year:
FIs should not count on deadline extensions in 2018 in those jurisdictions which required CRS reporting in 2017. These jurisdictions will likely have worked out the kinks in their systems and be prepared for the increased data submissions in 2018.
However, I anticipate that some of the jurisdictions commencing CRS reporting in 2018 will experience delays. For example, Brazil has almost 21,000 FIs that registered for a GIIN. Combine this large number of FIs with Brazil’s early reporting deadline, it will be a challenge for Brazil’s CRS team to stay on track.
Inventory the jurisdictions in which you have Reporting FIs and review the list of Reportable Jurisdictions for each of these jurisdictions.
Conduct a preliminary cross check to determine how many account holders each of your Reporting FIs has in the Reportable Jurisdictions.
Find a service provider that can handle your reporting requirements.
Make sure that you stay on top of any additions made to a particular jurisdiction’s list of Reportable Jurisdictions.