KPMG Statements On Signing Of Multilateral Competent Authority Agreement On OECD Automatic Exchange Of Information Standard
NEW YORK, Oct. 29, 2014 /PRNewswire/ --The following statements are being issued today by KPMG LLP concerning the signing of the Multilateral Competent Authority Agreement on implementation of the automatic exchange of information standard at the 7th meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes in Berlin, Germany:
"The agreement to exchange information under the OECD Common Reporting Standard (CRS) is a major international tax development and an important new step toward greater tax transparency," said Michael Plowgian, a principal in the International Tax group of the Washington National Tax practice of KPMG LLP and a former senior advisor with the Organisation for Economic Co-operation and Development (OECD). "It is also a significant development for financial institutions, which will face complex new customer due-diligence and reporting obligations under the Standard."
"The Standard calls on jurisdictions to implement standardized customer due-diligence procedures and reporting requirements for their financial institutions and to exchange the reported information with other governments on an automatic basis," Plowgian added. "While many of the signatories to the Multilateral Competent Authority Agreement have previously issued a joint statement committing to adopt the Standard, the agreement marks the first international agreement obligating them to collect and exchange this information with each other."
"While the United States is not a signatory to today's agreement, any branch or subsidiary of a U.S. financial institution in an implementing jurisdiction will need to comply with the Common Reporting Standards in that jurisdiction," added Plowgian, who has also served as attorney advisor with the Office of the International Tax Counsel at the U.S. Department of the Treasury. "The fact that the U.S. has not implemented the Common Reporting Standard may actually create additional challenges for U.S.-based financial institutions in coordinating implementation across the various jurisdictions in which they do business."
"Companies that are not financial institutions also need to be aware of the Common Reporting Standard and will need to determine and certify their CRS status if they do business with a financial institution in an implementing jurisdiction," said Plowgian, who added that the CRS is based on the intergovernmental agreements under the U.S. provisions commonly known as the Foreign Account Tax Compliance Act (FATCA).
Jennifer Sponzilli, a principal with KPMG's U.S. international tax team in the U.K., said: "The Common Reporting Standard and attendant commentary provides guidance to financial institutions in the signing jurisdictions about the scope of the due diligence and reporting obligations that will apply in those jurisdictions."
"Now that the Multilateral Competent Authority Agreement has been signed, there will be a race against the clock for both governments and financial institutions to meet the ambitious timelines," Sponzilli added. "Governments will likely need to enact legislation or regulations to effectuate the Multilateral Competent Authority Agreement in their jurisdictions. Financial institutions will be working hard to get customer due-diligence procedures in place by January 1, 2016 – less than 15 months from now – and then will turn to meet the deadline for the first reporting of information about nonresident account holders required in 2017."
About KPMG LLP
KPMG LLP, the audit, tax and advisory firm (www.us.kpmg.com), is the U.S. member firm of KPMG International Cooperative ("KPMG International"). KPMG International's member firms have 155,000 professionals, including more than 8,600 partners, in 155 countries.
Editor's Note:
The Standard for Automatic Exchange of Financial Account Information in Tax Matters calls on governments to obtain detailed account information from their financial institutions and exchange that information automatically with other jurisdictions on an annual basis. The Standard was developed at the OECD under a mandate from the G20, endorsed by the G20 Finance Ministers in February 2014, and approved by the OECD Council.
The Global Forum on Transparency and Exchange of Information for Tax Purposes is the world's largest network for international cooperation in the field of taxation and financial information exchange, bringing together 122 countries and jurisdictions plus the European Union. The meeting in Berlin, Germany was expected to see attendance from more than 200 delegates from more than 95 member jurisdictions and 12 international organizations.
Contact: Robert Nihen/Ann Marie Gorden
KPMG LLP
201-307-8296/201-505-6288
[email protected]; [email protected]
SOURCE KPMG LLP
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