Governments around the globe, including the United Arab Emirates, are building commitments towards international initiatives developed to fight tax evasion and promote tax transparency. The Organization for Economic Co-Operation and Development (OECD) has developed the “Common Reporting Standard” initiative, which requires governments in participating jurisdictions to collect financial account information from their financial institutions where related to customers who are tax resident outside of the country in which they hold their accounts, then automatically exchange this information on an annual basis with other jurisdictions if these are also participating in CRS. Participating jurisdictions will enact and implement the Common Reporting Standard under their local laws.
Starting from 1 January 2017, as a part of NBAD’s ongoing commitment to compliance with local laws and the global tax regulatory initiatives, we will be reaching out to certain customers to request information or documents to confirm their tax residency status.
Please refer to the OECD website or see our FAQs below for more information about the Common Reporting Standard.NBAD is not authorised to provide you with tax advice.
Should you have any queries relating to your tax residency status, please consult a tax advisor.
Frequently Asked Questions
Under the Common Reporting Standard (CRS), Financial Institutions are required to partake in the automatic exchange of financial account information for tax purposes.
Financial Institutions in participating jurisdictions are required to classify and report financial account information to their local tax authorities on Individual Account Holders, Entities and /or Controlling Persons of certain Entities, who hold their accounts outside of the country where they are tax resident. The local tax authorities will then exchange this information with the relevant tax authority.
In order to comply with these requirements, NBAD may need to share details and information about certain financial accounts you hold with us to the appropriate tax authorities. This includes (but not limited to) certain banking, savings and investment accounts. NBAD are unable to provide any tax advice to customers. Please consult your tax advisor, relevant tax authority or visit the OECD website.
What is the Common Reporting Standard (CRS)?
The Common Reporting Standard (CRS) is a global “FATCA-like” regime which requires the automatic exchange of financial account information between jurisdictions. The aim is to reduce tax evasion by taxpayers using offshore financial accounts held both directly and indirectly through enhanced information reporting.
Who is reportable?
Under the CRS, financial institutions are required to determine the tax residency status of their account holders. Financial institutions must then report certain account holder information about customers resident in CRS participating jurisdictions to their local tax authority or regulator.The tax authority or regulatory authority will then in turn exchange this information with the appropriate tax authority or regulator in the other CRS participating jurisdictions.
How is CRS different from FATCA?
FATCA requires information to be reported about US persons including US citizens and residents.
CRS is focused on identifying tax residency status of account holders in multiple jurisdictions. In addition, there are certain non-reporting statuses under FATCA that are not available under CRS as well as CRS does not have as many de minimis rules as FATCA. The US is not currently participating in the CRS. Therefore the bank may need to contact you in relation to both your FATCA/US status and tax residency status under CRS requirements.
What is tax residency? For individuals, tax residence typically means any jurisdiction where customers are liable to pay income taxes or have a tax return filing obligation.
This may be determined by where the individual works or actually lives, but there are other determining factors and based on each jurisdiction’s tax residency rules.For entities, this is typically where the entity has an obligation to file a tax return or liable to pay income or corporation taxes. The bank is not authorised to provide tax advice to customers.Therefore we suggest you contact a tax advisor.
Additional information may also be found on the OECD website.
Why is my tax residency information required? Under the CRS, tax authorities require financial institutions to collect and report certain information relating to their customers’ tax residency statuses. If you open a new bank account, invest in new financial products or your circumstances change in some way, you would be required to certify a number of details about yourself. This process is called “self-certification” and we are required to collect this information under the CRS. Similarly, if you hold an existing account with us, we may need to determine your tax residency status.
Do I have to provide this information again in the future?
An updated form shall be required in case of change in customer information and where this may indicate a change in tax residency status.
What information is NBAD reporting to the tax authorities?
Under the CRS requirements, for all accounts:
• Jurisdiction(s) of tax residence
• Name of the Reporting Financial Institution
• Account number
• Account balance
• Gross amount paid to the account in a year (interest, dividends, other income)
• Gross proceeds paid or credited to the accoun
Additional information for individual accounts and Controlling Persons may include:
• Date of birth
• Place of birth
Will NBAD share my data with other parties?
NBAD will share the information with its local tax authority (or equivalent) who will then in turn share the information with other tax authorities where the customer is resident for tax purposes.
Is NBAD the only bank doing this?
All financial institutions – that includes banks, custodians, insurers and asset managers– in participating countries are required to be compliant with the CRS.
What other countries are taking part in the CRS?
Please refer to the OECD CRS website for the list of countries participating in the CRS, alongside the dates that they will start exchanging information.
I have already given my consent to share the information under FATCA, why do I need to give it again?
Please note - This question is relevant to Model 2 and non-IGA jurisdictions.The consent given by you is specific to sharing of information with the United States Internal Revenue Service. The CRS would require exchange of information with CRS participating jurisdictions for which you are identified as tax resident.
What are the consequences of not providing the required information?
Where you do not respond to information requests before the required deadline, we may be required to report you and share your details with tax authorities where we have information to indicate you are resident.
Is my information safe?
How do I know that the information I shared is not being shared / used by third party?NBAD is subject to strict confidentiality requirements and data safeguards as outlined under local law. As per regulatory requirements, the information is only exchanged with the tax authorities of the relevant country.
Where can I find further information about CRS and advice for tax residency?
Information about the CRS may be found on the OECD website.