The Common Reporting Standard (CRS) is a component of the Standard for Automatic Exchange of Financial Account Information (AEOI) proposed by the Organisation for Economic Co-operation and Development (OECD) in July 2014. It aims to improve tax transparency through strengthened global tax cooperation and to combat tax evasion using cross-border financial accounts. It is currently being implemented progressively across various countries and is expected to fully cover all tax jurisdictions by 2018.
It has been three years since the proposal of CRS; what is the current progress of CRS?
Recently, the OECD released a tax report during the G20 summit. The report disclosed significant information regarding international tax developments and the progress of CRS information exchange implementation.
The report shows that global tax transparency is being further strengthened. As of July 2017, nearly 2,000 bilateral relationships for automatic information exchange have been activated. Currently, efforts in information exchange have begun to show results: approximately 500,000 individuals have disclosed offshore assets, and additional tax revenue of approximately 85 billion euros has been collected. This is equivalent to the total annual agricultural export value of the Netherlands, the world's second-largest agricultural exporter, in 2016!
The report also shows that among the 101 countries and regions that have committed to implementing CRS, including China, the first batch of 50 countries began exchanging information in 2017, and the other 51 countries will begin exchanging information from 2018. Among these countries and regions, 80% have implemented a complete legal framework for the collection and reporting of financial institution information. 17 jurisdictions outside the 101 tax jurisdictions have also improved their information exchange standards, creating legal foundations and policy conditions for the smooth implementation of CRS.
As can be seen from this report, CRS is in full swing and has begun to show results; the era of global taxation has arrived. As a member of the OECD, financial institutions in mainland China officially began due diligence on customer financial accounts on July 1, 2017, marking the beginning of the "China version of CRS," and will conduct the first exchange of financial account tax information with other CRS participating countries in September 2018.
For high-net-worth individuals in China who have overseas accounts or engage in investment and wealth management through holding overseas shell companies, it is urgent to adjust their global asset allocation structure early to avoid "naked" assets.
Against the backdrop of CRS being in full swing, how can high-net-worth individuals reasonably respond to CRS?
High-net-worth individuals can plan their tax residency status to quickly obtain a third-country passport from a tax haven, such as a Dominica passport, and use the Dominica passport identity to open overseas accounts and hold overseas assets to reasonably respond to CRS.
Dominica is a world-class tax haven with a superior tax system. It is exempt from capital gains tax, inheritance tax, and gift tax, and is one of the few non-global tax countries. It implements a "0" tax policy on the overseas income of its citizens. Using a Dominica passport identity for overseas asset allocation allows for reasonable asset allocation and tax planning, enabling one to calmly cope with the impact brought by CRS.
Advantages of a Dominica Passport:
1. Harmonious relationship with the Dominica government; WorldWay clients enjoy multiple exclusive privileges;
2. One person invests, and four generations of the family can legally obtain citizenship (nationality) at one time;
3. Low investment amount, starting from $100,000 USD, to obtain a Commonwealth passport at a low cost;
4. Convenient travel; you can hold this passport for visa-free or visa-on-arrival access to 130 countries and regions, including Schengen countries, the UK, Singapore, Hong Kong (China), Ireland, etc.;
5. Dual citizenship is recognized, which does not affect life in China;
6. Short application time, approval can be obtained within 2-3 months after submission;
7. No immigration supervision requirements, no requirement to land;
8. Tax-free haven, no property tax, gift tax, foreign income tax, capital gains tax, etc.;
9. Beautiful environment, a vacation paradise.
As one of the first immigration companies to introduce the Dominica Citizenship by Investment Program to China, and also a company that has successfully promoted the Dominica passport, WorldWay has maintained good government relations for many years. The Prime Minister of Dominica, Hon. Roosevelt Skerrit, has visited WorldWay executives multiple times and has brought preferential treatment to WorldWay clients, such as simplifying application materials and accelerating approval speed. Choose WorldWay for Dominica immigration, and your immigration journey will be easier! For more details, please consult: 400-138-2929.
