This page explains what Automatic Exchange of Information (AEOI) and the Common Reporting Standard (CRS) are and what they may mean for you.
What AEOI is
Globalisation has made it easier for people to invest money outside their tax residence jurisdiction. This has provided opportunities for offshore tax evasion.
New Zealand is one of many jurisdictions that has committed to a global initiative led by the Organisation for Economic Co-operation and Development (OECD) on the automatic exchange of financial account information using the CRS.
This information is required by law to be collected by financial institutions around the world for reporting to tax authorities. Tax authorities will exchange this information to ensure everyone pays the right amount of tax. Tax pays for services we all need and to improve the communities in which we live.
If you're identified as being a foreign tax resident
If you currently hold (and, in certain circumstances, control) an account with a New Zealand financial institution, your financial account information may be reported to us. We may share this information with your home country or jurisdiction if New Zealand has an AEOI exchange relationship with them. This applies whether you are currently living in or outside of New Zealand.
If you're a New Zealand tax resident
If you have financial accounts in any of the jurisdictions participating in the AEOI, this information may be shared with us.
Go to our Tax Policy website for our Special report on the automatic exchange of information.
Special report on automatic exchange of information (Tax policy)
Find out more on the OECD website about tax transparency and international co-operation.
Tax transparency and international co-operation (OECD)
Go to the OECD YouTube channel for their Crackdown on tax evasion video.
Crackdown on tax evasion (OECD YouTube channel)
What the CRS is
The CRS is a global framework for the collection, reporting, and exchange of financial account information about people and entities investing outside of their tax residence jurisdiction.
The CRS and a comprehensive commentary along with other information about AEOI are available on the OECD's website. The CRS and the related commentary have been introduced into New Zealand law.
Go to the Common Reporting Standard on the OECD website.
International standards on tax transparency - Common Reporting Standard
CRS was modelled on the Foreign Account Tax Compliance Act (FATCA) introduced globally by the United States of America during 2014, but there are significant differences between the two schemes.
Find out more about FATCA.
Foreign Account Tax Compliance Act (FATCA)
Jurisdictions committed to CRS
Over 100 jurisdictions have committed to implementing the CRS. In 2018, 85 jurisdictions including New Zealand have completed around 4,500 bilateral exchanges.
Find more information on participating and reportable jurisdictions that are committed to implementing the CRS.
Jurisdictions committed to the Common Reporting Standard (CRS)
Download the OECD list of over 100 jurisdictions committed to implementing the CRS.
Status of commitments for the automatic exchange of financial account information (AEOI) (PDF 162KB)
New Zealand is prepared to receive financial account information from participating jurisdictions. We will only provide financial account information to reportable jurisdictions.
Who and what the CRS applies to
The CRS applies from 1 July 2017 to financial institutions, account holders and certain other people who control accounts.
How we will use this information
If you're identified or treated as being a foreign tax resident under the CRS, certain information about you may be collected and provided to us. This includes:
- your identity details
- your account balance
- your income and payment information
- other prescribed information.
If New Zealand has an AEOI exchange agreement with your jurisdiction of tax residence, we will send this information to the tax authority in that jurisdiction.
The exchange of financial account information will also mean that New Zealand receives better information about New Zealand tax residents' offshore investments. This will help us verify that these people have paid the correct tax on their offshore investments.
We may also use information collected from Reporting NZFIs under the CRS for other purposes. We will only use this information for matters that are consistent with our statutory role and obligations.
We will handle all information reported under the CRS in the strictest confidence as will the foreign tax authorities. Domestic laws, administrative practices and binding international treaties protect your information.
Establishing tax residency
If you have questions about your tax residence status, you should either contact us or another tax authority in a relevant country, or seek advice from a tax agent or advisor.
For CRS purposes there are special rules for determining the tax residency of certain types of entities, such as partnerships, limited liability partnerships, or similar legal arrangements that do not have a tax residence. These entities are treated as resident in the jurisdiction where their place of effective management is situated.
Find out more about establishing tax residency.
Tax residency status for individuals
Tax residency status for companies
For more information about tax residency rules applicable to CRS committed jurisdictions go to the OECD Automatic Exchange Portal.
Tax residency - Organisation for Economic Co-operation and Development
Double tax agreements (DTAs)
If two countries or territories both tax their residents on worldwide income, you could be taxed twice on the same income.
DTAs have been negotiated between New Zealand and many other countries or territories to decide which country or territory has the first or sole right to tax specific types of income.
Find out if your country or territory has a DTA with New Zealand.
Penalties that may apply to account holders and controlling persons
Penalties may apply if you provide false or misleading information, fail to provide this information, or fail to provide an update if there is a material change to the information you have provided.
This includes civil penalties of $1,000 that Inland Revenue could apply as well as criminal penalties that can apply for knowledge-based offences.
You can find more information in Section 9 Penalties Regime in our Guidance on the CRS for AEOI - IR1048.
Reporting NZFIs
Penalties can apply if you do not comply with your CRS due diligence (including record keeping) and reporting obligations. This includes escalating thresholds of civil penalties and criminal penalties for knowledge-based offences.
You can find more information in Section 9 Penalties Regime in our Guidance on the CRS for AEOI - IR1048.