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The Common Reporting Standard (CRS)

If you live in Spain and have monies deposited in another country using your Spanish address, information will be shared with Spanish tax authorities each year.


I have written earlier articles about the Common Reporting Standard at the time it was introduced, but in this article, I will delve deeper into the detail of how the Common Reporting Standard may affect your finances.


The Common Reporting Standard (CRS) was developed by The Organisation for Economic Co-operation and Development (OECD) in 2014 for the automatic exchange of information between partner countries to fight tax evasion. It applies to each country that has committed to the CRS.  As of March 2024, there are over 5400 bilateral exchange agreements between individual countries with more than 120 jurisdictions committed to the CRS of a total of 195 countries worldwide, with the next exchanges between these jurisdictions set to take place at the end of September 2024.  Introduced globally with effect from 2016, the Common Reporting Standard (CRS) mirrors the US FATCA guidelines and builds on them.  Information regarding investment, savings and bank account balances and withdrawals is now collected automatically on 31 December each year by each financial institution and passed to the tax office of your country of residence if the account is held in a country other than which you reside.  Domicile, nationality or citizenship is not taken into consideration.


For instance, bank account details as at 31 December for an account held in the UK will be reported to HMRC on 30 September the following year if you are not UK resident.  HMRC then share this information with the tax office of your country of residence, for instance, the Hacienda if you live in Spain.


For many developing countries, implementing the technical conditions of the Common Reporting Standard is a challenge.  Implementing the Standard effectively not only requires the reporting obligations to be translated into domestic law but the introduction of a framework to enforce compliance with those obligations. The Standard therefore specifically requires jurisdictions to ensure that the CRS is effectively implemented and applied by financial institutions.


As mentioned earlier, the CRS focuses on financial assets.  For example, information on property, yachts, aircrafts, luxury cars, safe deposit boxes in banks, art collections, gold and jewellery is not exchanged.


Financial Institutions prepare the data to report and the tax authority validates and sorts the information before exchanging it.   Information is shared on an annual and automatic basis.  Furthermore, the files containing the tax information should be encrypted in accordance with the commonly agreed encryption standards.

The split between Pre-existing Accounts and New Accounts


Pre-existing Accounts:


In general, for Pre-existing Accounts, Financial Institutions are generally allowed to rely on the information they hold on file to determine the residency of the Account Holder, whereas for new accounts a self-certification form is required from the  new Account Holder.


The Reporting Financial Institution can review its electronically searchable data for any of the following factors that indicate where an Account Holder is resident:


-          current mailing or residence address

-          current or most recent foreign telephone numbers and no telephone number in the jurisdiction of the Reporting Financial Institution

-          current standing order instructions to repeatedly transfer funds to an account maintained abroad

-          current power of attorney or signatory authority granted to a person with an address abroad

-          a current “hold mail” instruction or “care-of” address abroad if the Reporting Financial Institution does not have any other address on file for the Account Holder


If any of the above are discovered in the electronic search, or if there is a change in circumstances that results in one or more of the above being associated with the account, then, the Reporting Financial Institution must treat the Account Holder

as a resident for tax purposes of each Reportable Jurisdiction for which an indicium is identified, unless a self-certification form is obtained from the Account Holder stating their jurisdiction of residence and/or Documentary Evidence is obtained establishing the Account Holder’s status.

New Accounts:


Any individual that opens an account needs to provide a self-certification form which establishes where the individual is resident for tax purposes. If the Account Holder is resident for tax purposes in a Reportable Jurisdiction, then, the Reporting Financial Institution must treat the account as a Reportable Account and share the account information.


Self-certification can be provided in any form but in order for it to be valid, it must be signed (or otherwise positively affirmed, i.e. involving some level of active input or confirmation) by the Account Holder, be dated, and must include the Account Holder’s name, residence address, jurisdiction(s) of residence for tax purposes, tax identification number (TIN) and date of birth.


Once the Reporting Financial Institution has obtained a self-certification it must confirm its reasonableness based on the information obtained in connection with the opening of the account, including any documentation collected pursuant to Anti Money Laundering (AML) and Know Your Client (KYC) procedures (the reasonableness test).


A Reporting Financial Institution is considered to have confirmed the reasonableness of a self-certification if it does not know or have reason to know that the self-certification is incorrect or unreliable. Where a self-certification fails the reasonableness test the Reporting Financial Institution is expected to either obtain a valid self-certification or a reasonable explanation and documentation as appropriate supporting the reasonableness of the self-certification.


An account is treated as a Reportable Account from the date it is identified as such and maintains such status until the date it ceases to be a Reportable Account.


For account balances the relevant balance or value must be determined as of 31 December of the calendar year.


The information that gets reported and exchanged


The information is:


•        information required for the automatic exchange partner jurisdiction to identify the Account Holder concerned (Identification information);

•        information to identify the account and the Financial Institution where the account is held (Account information); and

•        information in relation to the activity taking place in the account and the account balance (Financial information).

-          Each holder of a jointly held account is attributed the entire balance or value of the joint account, as well as the entire amounts paid or credited to the joint account.


Offshore Trusts


The protection of assets and wealth through offshore trusts is already a very interesting topic, but it can be more so if we take into account the CRS.  This is a complex area outside the scope of this article, but as trusts are widely used to protect family wealth, I will try to offer some information on how trusts can be impacted by the CRS guidelines.  The overall message I want to share here, is that it’s important not to presume that if you have a trust, that your information will not be shared.


If a settlor or beneficiary is resident in a Reportable Jurisdiction, they are an Account Holder and their Equity Interest is a Reportable Account for the purposes of the CRS.


A discretionary beneficiary will only be treated as an Account Holder in the years in which the beneficiary receives a distribution from the trust. If a settlor, beneficiary or other person exercising ultimate effective control over the trust is itself an Entity, that Entity must be looked through (including any further intermediate Entities), and the ultimate natural controlling person(s) behind that Entity must be treated as the Account Holder in respect of the CRS reporting requirements.


The trust will report the account information and the financial activity for the year in respect of each Reportable Account. The account information includes the identifying information for each Reportable Person (such as name, address, residence, Tax Identification Number, date of birth and Account Number), and the identifying information of the trust (name and identifying number of the trust).


The financial activity includes the account balance or value, as well as gross payments paid or credited during the year.  If the Financial Institution has not otherwise recalculated the balance or value for other reasons, the account balance for settlors and absolute (or mandatory) beneficiaries could be the value upon acquisition or the total value of all trust property.


Trust Reporting where the trust would not otherwise calculate the account value (for example, it is not routinely recalculated to report to the customer, such as residential property held in trust) is treated as follows:

Passive Trust reporting (Examples of passive entities are family trusts, investment clubs or non-profit entities) is treated as follows:



How is a usufruct (a legal right to use and derive profit from property) treated for CRS purposes?


Both the bare owner (“nu-propriétaire”) and the usufructuary (“usufruitier”) are considered joint Account Holders for reporting purposes.


Is it possible that after the application of the residence address test it can be determined that the Account Holder has two residence addresses?


Yes. Provided all the conditions for applying the residence address test are met, then it would be possible for the residence address test to result in two addresses being found. For example, with respect to a bank account maintained in Country A, a bank could have two addresses meeting the requirements in a case where a resident of Country B is working and living half her time in Country B and Country C. In this case a self-certification could be sought or the account could be reported to all Reportable Jurisdictions where there is a residence address.


What are the obligations of a Financial Institution to establish the tax residency of its customers in relation to the New Account procedures?


A Financial Institution is not required to provide customers with tax advice or to perform a legal analysis to determine the reasonableness of self-certification. Instead, for New Accounts the Financial Institution can rely on a self-certification made by the customer unless it knows or has reason to know that the self- certification is incorrect or unreliable, (the “reasonableness” test), which will be based on the information obtained in connection with the opening of the account, including any documentation obtained pursuant to AML/KYC procedures.


Participating Jurisdictions are expected to help taxpayers determine, and provide them with information with respect to, their residence(s) for tax purposes.


How are indirect distributions by a trust treated under the CRS?


A Reportable Person will be treated as a beneficiary of a trust “if such Reportable Person can receive, directly or indirectly, a discretionary distribution from the trust”.

Indirect distributions by a trust may arise when the trust makes payments to a third party for the benefit of another person. For example, instances where a trust pays the tuition fees or repays a loan. Indirect distributions also include cases where the trust grants a loan free of interest or at an interest rate lower than the market interest rate or at other non arm’s length conditions. In addition, the write-off of a loan granted by a trust to its beneficiary constitutes an indirect distribution in the year the loan is written-off.


In all of the above cases the Reportable Person will be person that is the beneficiary of the trust receiving the indirect distribution (i.e. in the above examples, the debtor of the tuition fees or the recipient of the favourable loan conditions).



I hope this has given you some clarity in respect of the Common Reporting Standard requirements.  The information provided has been taken directly from the OECD (2018), Standard for Automatic Exchange of Financial Information in Tax Matters - Implementation Handbook - Second Edition, OECD, Paris.


It is actually fairly easy to organise your finances in a tax efficient way without worrying about information that may be shared between tax authorities.


At Speed Financial Solutions, our aim is to ensure that you are able to enjoy life while we take care of your finances, ensuring you’re set up in the most tax efficient way for your particular circumstances and maximising any tax efficient investment opportunities as they arise.  If you are considering how best to set up your finances for your life in Spain please contact us.


Speed Financial Solutions are a highly qualified and regulated financial services provider looking after clients throughout Spain and the UK.  Established in 2010, we provide a discreet and comprehensive service to individuals, and our service is tailored to suit your needs taking advantage of tactical opportunities as they arise in respect of your financial planning.


Our Principal, Andrea Speed, is a qualified Discretionary Investment Manager specialising in Investment and Risk, Taxation and Trusts,  and a qualified Pension Specialist.  Andrea is also a Fellow of the Chartered Insurance Institute (CII), which is the world’s largest professional body for insurance and financial services in the world. 


Fellowship is the highest qualification awarded by the CII (Level 7) and is universally regarded as the premier qualification.  It is a major achievement in the financial industry and demonstrates the acquisition of skills and knowledge at the highest of levels.  Along with a Fellowship, Andrea is a CII Chartered Financial Planner.


Please take a look at our website –

For further information contact us on Tel 951 315 271 or 951 318 529


We are happy to discuss your own situation in more detail. One of our advisers would be pleased to spend some time with you either in your home or at our office to review your current savings, investments and pensions, so do call to make an appointment. Our Financial Review is completely free of charge and without obligation.  Follow us on Facebook for regular updates.


This communication is for information purposes only based on our understanding of current legislation and practices which is subject to change and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice form a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.


Andrea J Speed FPFS (DM), M.A.

Principal, Fellow and Chartered Financial Planner

Speed Financial Solutions

26 April 2024

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