by Eesh Aggarwal FCA TEP

INTAX Expo UAE 2016

OECD:

Common Reporting Standard.

Are you ready?

1 Who are we?

CRS privacy invasion

Case studies

CRS weaknesses

2

3

4

Azure Consultants

Offshore Company Formation

International Tax Planning, Tax Law

UK VAT registration

Fiduciary & Trustee

Audit & Accounting

Wealth Management

Team of specialists in the bespoke design and

management of legal and financial structures to

protect and grow your wealth

AREAS OF PRACTICE (since 1993):

Azure Consultants

WORLDWIDE OFFICES:

Eesh Aggarwal

UK chartered accountant, registered auditor,

licensed trustee;

Over 20 years experience in UK/International

accounts and tax planning;

Lectured at LSE, ICSA, Moscow Institute of Risk

Management

Clients range from start-up entrepreneurs to ultra-

high net worth individuals and their related

businesses.

United Kingdom Mauritius Cyprus

CRS privacy invasion

Who are we?

Case studies

CRS weaknesses

2

1

3

4

The Objective of CRS

TO ERADICATE TAX EVASION by forcing

Automatic Exchange of Information (AEOI)

Offshore Problem

Offshore bank accounts have become

common by means of:

• Internet banking

• Cash cards

• Investments

Key problems are:

• Strict privacy laws

• Tax evasion possible

Pre-AEOI attack

Tax treaty access

Anti money laundering

Tax Information Exchange Agreements

(TIEA)

Problems

• Individual enquiry basis

• Slow

• Expensive

AEOI attack #1 - FATCA

History

• Target US taxpayers with overseas monies.

• Assumed massive tax evasion

Action

Every financial institution globally is forced to register

and report US monies. Fear of 30% withholding tax.

AEOI attack #2 - CRS

Identification and documentation

Reporting Exchange of information

1 2 3

Account Holders

Entity Reporting Financial

Institutions

Foreign tax authorities in countries of account holders and controlling persons

Entity

Controlling Person

Domestic Tax Authorities

What is reported?

Financial Accounts

• Bank accounts

• Insurance savings

• Loans

Financial Assets

• Securities

• Shares in underlying

companies

Non-Financial Assets

• Precious metals

• Art

• Real estate (no loans)

• Cars, yachts + airplanes

REPORTABLE

NOT REPORTABLE

Who will report?

Action Every financial institution globally is forced to register and report US monies. Fear of 30% withholding tax. CUSTODIAL

(>20%)

e.g. holding companies,

CSP?

DEPOSITORY (all)

e.g. Banks

INVESTMENT ENTITIES (> 50%)

e.g. funds,

trusts, trustees,

CSP?

INSURANCE (savings)

e.g. life

insurance companies

Which account holders are reported?

INDIVIDUALS

CRS tax residents

All entities with

CRS resident

controlling person(s)

• Shareholders

• UBO’s

• Partners

• Owners

ENTITIES

CRS tax resident

entities

Active entities

are not reported

CRS report contents

Account Information

Entities

• Account balances 31

December

• Interest

• Dividends

• Insurance contracts

• Sales proceeds from

financial assets

• Any accounts closed

• Individuals

• Companies

• Trusts

• Foundations

• Controlling persons of passive

NFEs

Individuals & Entities detailed

When?

Account Information

Entities

Individuals & Entities detailed

Case studies

Who are we?

CRS comes in every house

CRS weaknesses

3

1

2

4

Case study #1 Individual with overseas bank account

Entities

Case study #2 Company with overseas bank accounts (nominees)

Account Information

Entities

Case study #3 Trust with underlying companies

Account Information

Entities

CRS weaknesses

Who are we

CRS privacy invasion

Case studies

4

1

2

3

CRS weaknesses Non standard AEOI legal agreement

Account Information

War, sanctions, political pressure etc.

3

1

2 3

CRS weaknesses

Account Information

Entities

Invasion of foreign privacy laws

Increased cost pressure on tax havens

Big business and trading entities

exempt

Massive costs for minimal benefit!

SIMILAR TO FATCA:

Unprecedented costs > US$ 1 trillion?

No costs to US based banks and institutions!

How to bypass the CRS

Account Information

Entities

Change residency

Close bank accounts

Open non-CRS accounts

Hawala

Non-financial assets

Repatriate money back home

The Future “Roll the dice”

Entities

Tracking of wealth of CRS residents

Freezing, confiscation

Innovative new taxes to seize offshore

wealth

Conclusion

• Ideology trumps pragmatism

• Missing the target

• Jurassic park – “nature will find a way”

Standard price $449

*Note:

*

Special offer

during conference only

$300