Is it a signatory (or does it propose to become a signatory) to the Common Reporting Standard? And/or does it maintain (or intend to maintain) a public Register of beneficial ownership?
Tax (2nd Edition)
Spain is a signatory part of the Common Reporting Standard (CRS) from the date of the beginning of the adhesion process to the Template Agreement for the Competent Authority for the automatic exchange of information between countries developed by the OECD. Such exchange system allows tax administrations of the adhered countries to have periodical tax information about the investments of their contributors in financial institutions located abroad.
The implementation of the CRS has been made by means of Directive 2014/107/UE of the Counsel, of 9th December 2014, which modifies Directive 2011/16/UE of the Counsel, of 15th February 2011. Spain has transposed the regulation changes into its body of laws by means of the modification of the General Tax Law and Royal Decree 1021/2015, of 13th of November, which establishes the obligation of identifying the tax residence of the individuals who own or control certain financial accounts and of informing about them in the scope of mutual assistance. Such Decree develops the regulations stating the information obligations and the due diligence proceedings that banks need to fulfil in order to obtain information from their clients.
On the other side, as a novelty, by virtue of Ministerial Order of 21st of March 2018 of the Ministry of Justice, there is the obligation to identify the real owner of a corporation at the moment of submitting its annual accounting books before the Public Registry of Commerce. It implies that corporations in which the real owner of more than 25% of the equity is an individual shall make the statement. In the following years, such statement shall only be made if there are relevant changes in the shareholders of the corporation.
Yes, Romania is a signatory to the Common Reporting Standard. At this stage, we are not aware of an intention of the Romanian authorities to maintain a public register of beneficial ownership.
Australia is a signatory to the Common Reporting Standard. Legislation implementing the Common Reporting Standard took effect on 1 July 2017.
At present, Australia does not maintain a public Register of beneficial ownership. Treasury is currently considering the potential operation of a Register of beneficial ownership and intends to make recommendations to the Government on the details, scope and implementation of such a Register.
To inform its recommendations, Treasury is currently consulting stakeholders and considering submissions made in response to a public consultation paper.
France is a signatory of the multilateral Convention on Mutual Administrative Assistance in Tax Matters and has activated exchange relationships for the Common Reporting Standard information with 50 jurisdictions. France has authorised the approval of the multilateral agreement by the law 2015-1778 dated December 28, 2015 and the Common Reporting Standard is applicable in France since January 1, 2016.
In order to comply with the Directive 2011/16/UE dated February 15, 2011 modified by the Directive 2014/107/UE that resumed the Organisation for Economic Co-operation and Development (OECD) reporting and the Directive 2015/2376/UE, the law 2015-1786 of December 29, 2015 provides that French financial institutions have to declare specific information for the application of the automatic exchange of information provided by French tax conventions but also for the application of the Directive regarding the administrative cooperation and finally for the Common Reporting Standard.
Companies are now required to disclose the identity of their beneficial owners – i.e. individuals owning, directly or indirectly, more than 25% of the company’s equity or voting rights or, failing that, the person exercising control over the management or management bodies within the companies and undertakings for collective investment.
France would not maintain a public register of beneficial ownership because the Constitutional Council has already declared such rule of public access unconstitutional concerning the trusts (i.e. Constitutional Council decision n° 2016-591 dated October 21, 2016). Currently, the register's access is granted only to French authorities such as Tracfin, judicial authorities, custom officers and tax administration.
The right of communication of the beneficial owner's register is therefore limited to the legal representatives, some entities listed within the French monetary and financial code (such as judges, custom officers or General directorate of public finances, investigators of the French financial market authority), entities falling within the scope of anti-money laundering and terrorist financing (such as credit institution, insurance companies, mutual insurance, investment service providers, etc…), or any person justifying a legitimate interest, upon an order made by the judge engaged in the supervision of the companies register.
Belgium is a signatory to the Common Reporting Standard and has transposed it into national law by virtue of the Law of 16 December 2015. On 20 July 2017, the Belgian parliament has passed a law introducing a public Register of beneficial ownership, thus implementing EU Directive 2015/849 of 20 May 2015. The Register is however not yet in place and several key modalities still have to be worked out by royal decree.
Yes, the Common Reporting Standard is implemented in the Bulgarian law since 1st of January, 2016. Bulgaria is committed to first exchange in 2017. For the moment Bulgaria does not intend to maintain a public Register of beneficial ownership.
It is unclear whether the United States will become a signatory of the Common Reporting Standard (CRS). The United States does not maintain a public register of beneficial ownership.
In 2010, the United States introduced the Foreign Account Tax Compliance Act (FATCA) which was the basis for CRS. While CRS has similar objectives as FATCA, there are significant differences between CRS and FATCA, including the scope of information to be reported, the definition of a financial institution and applicable de minimis levels.
As an EU member Cyprus is bound by Directive 2014/107/EU on mandatory automatic exchange of information in the field of taxation. It is also a signatory to the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information. Cyprus implemented the Common Reporting Standard from the beginning of 2016 and will exchange information regarding 2016 in 2017.
Registers of beneficial ownership are maintained by the regulatory authorities such as the Cyprus Securities and Exchange Commission, which regulates corporate and fiduciary service providers, and the Cyprus Bar Association and the Institute of Certified Public Accountants of Cyprus, which regulate their members’ activities in this area. The registers are open to inspection by the relevant authorities for appropriate purposes, but they are not open to inspection by others.
The Common Reporting Standard was implemented in Canada effective July 1, 2017. Canada does not presently maintain a public Register of beneficial ownership.
Ecuador is not yet part of CRS. However, Ecuador just adhered to the Global Forum last May. It is expected that the local tax administration will promote amendments to the law to allow implementation of CRS soon.
The UK is a signatory to the CRS. Financial Institutions will need to report specified information to HMRC by 31 May 2017. HMRC will then exchange the relevant information with participating jurisdictions by 30 September 2017. Information of beneficial ownership of companies is now publicly available on the Companies House website.
Gibraltar is an ‘early adopter’ of the CRS. It has committed to implement a public register of beneficial ownership.
Similar to other countries, Israel has also committed to implementing automatic exchange of information under the OECD Common Reporting Standard (“CRS”) and the US Foreign Account Tax Compliance Act (“FATCA”). Under both the CRS and FATCA, the ITA will obtain financial information from Israeli financial institutions pertaining to financial accounts of non-Israeli residents and will exchange such information with partner jurisdictions on an automatic and annual basis. Domestic legislation and regulations have been adopted to facilitate compliance with said exchange of information obligations.
Switzerland is a signatory to the Multilateral Competent Authority Agreement and the Common Reporting Standard (‘CRS MCAA’), therefore committing to implement the OECD’s standard for automatic exchange of information. The appropriate legal foundations have been introduced into Swiss law, and the first automatic exchanges of information will take place in 2018.
Switzerland has responded to calls to increase the transparency of companies with the Federal Act for Implementing the Revised FATF Recommendations of 2012. Whilst this Act has brought a number of changes and obligations, it also included some very important updates to the requirements around beneficial ownership. Any individual who owns or controls over 25% of an entity’s share capital or voting rights (whether held by bearer shares or registered shares) is required to be identified to the company or an appointed financial intermediary. The information will be made available to the Swiss authorities, which goes someway to increase the transparency of Swiss companies.
Italy is a signatory to the Common Reporting Standard. Being one of the early adopters, the provisions of the CRS entered into force on January 1, 2017.
The legislative Decree No. 90 of 2017 which implemented the provisions of the Directive (EU) 2015/849 of the European Parliament and of the Council on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing provides for the introduction of a public register of beneficial ownership which shall include data relevant to beneficial owners of companies and other entities and arrangements (including trusts).
Yes, Portugal is a signatory to the Common Reporting Standard (“CRS”). As such, the information concerning 2016 should to be reported by the financial institutions to the Portuguese Tax Authority until 31 July 2017 which, in turn, shall exchange information with the Tax Authorities of the remaining States until 30 September 2017.
Recently, it has been approved the Legal Regime of the Central Registry of Beneficial Ownership, transposing Chapter III of Directive 2015/849 of the European Parliament and of the Council of 20 May 2015.
This Registry shall be managed by the Institute of Registries and Notaries (IRN), a public institution that executes and monitors policies relating to registration, to ensure the provision of services to citizens and companies in the field of civil identification and civil registration, nationality, land, commercial, movable and legal persons.
Kenya signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (the Convention) on 8 February 2016. Kenya is in the process of ratifying the Convention in accordance with domestic law.
Kenya does not currently maintain a public register of beneficial ownership. However, the Income Tax Act and the Tax Procedures Act require every person to notify the KRA of any changes in beneficial ownership of the shareholding in a Kenyan company.
Yes, Japan is a signatory to the Common Reporting Standard, and has already promulgated and enforced its domestic legislation to implement the Common Reporting Standard. The NTA has released to the public detailed guidelines on what information will be disclosed and what due diligence should be undertaken by financial institutions as well as other details. There is no system of a public register of beneficial ownership; in practice the beneficial owner is identified through tax audit.
The Netherlands is a signatory to the Common Reporting Standards as prescribed by a Directive of the EU pursuant to the guidelines of the OECD and enacted related legislation effective as per January 1st, 2016.
A consultation document regarding the public register of ultimate beneficial ownership has been published by the MoF but has not yet been enacted.
In terms of the Federal Tax Code, information provided by taxpayers to the competent authorities is considered as confidential and it is duly protected from disclosure to third parties. In this sense, such information could only be provided to other governmental authorities in cases sanctioned by law and assuming that due process has been abided by.
Nonetheless, it should be noted that certain information could be required from tax authorities on an international scale, in pursuance of broad exchange of information agreements or other relevant instruments such as FATCA or CRS.
Norway is a signatory of the Common Reporting Standard and has implemented it in national law.
Norway is in the process of creating a public ownership registry to ensure transparency of ownership. On June 5 2015 the Norwegian Parliament voted to establish a public registry of corporate ownership information. As yet, the Government has not announced a proposal/proposition as to what the new beneficial ownership registry should look like.
Germany is signatory of the Multilateral Competent Authority Agreement and therefore has implemented the common reporting standard into national law. The first automatic exchanges of tax relevant information with other countries, such as information about banking accounts or realized capital gains, have started as of September 2017.
Germany has also implemented information exchange clauses in the vast majority of its double taxation agreements under which certain information might be disclosed to other countries’ tax authorities.
As of 1 October 2017, Germany maintains a public register of beneficial ownership. Amongst others, any individual who owns 25% of the share capital or voting rights of an entity or controls the entity is treated as the beneficial owner, which has to be identified by the company or the financial intermediary as the case may be and has to be registered in the so-called transparency register. However, if the beneficial owner is already registered in the commercial register as a shareholder of the respective entity, no additional registration in the transparency register is required. The information contained in the transparency register will be made available to governmental bodies or to any person who can provide evidence of a legitimate interest. According to the explanatory memorandum to the act implementing the transparency register, in particular anti-corruption or tax-related NGOs and specialized journalists shall have such a legitimate interest to inspect the transparency register.
Austria is a signatory of the Common Reporting Standard providing for the automatic exchange of information between member countries on financial accounts of non-residents. It exchanges information on accounts which non-residents hold with Austrian financial institutions with all EU member countries and the countries which have signed and ratified the multilateral competent authority agreement of 29 October 2014, appearing on a list.
Austrian corporations have to disclose their beneficial ownership information to a central register kept by the Austrian Ministry of Finance by May 2018.