Common Reporting Standard (CRS)

Participating countries put the standard into domestic law. Banks, insurers, funds and custodians, together called reporting financial institutions, must collect a tax residence declaration from new account holders, review existing accounts for signs of foreign residence, and report the accounts of foreign residents each year. The report includes identity, tax identification number, balance and income. Certain entities, such as passive companies and some trusts, must be looked through to the controlling persons behind them. The tax authority then sends the data to the holder's country of residence through automatic exchange. Well over a hundred jurisdictions take part. CRS was modelled on FATCA but works on residence, not citizenship, and covers many countries instead of just one. Customers meet it as the tax form at account opening. Undeclared foreign accounts are much harder to keep hidden once banks report them automatically.

A private bank opens an account for a consultant who gives a home address in Country A but a passport from Country B. She signs a self-certification stating she is tax resident only in Country A. The bank reports the account to its own authority, which exchanges the data with Country A's tax authority.