For a financial institution to report under the Common Reporting Standard (CRS), it must be a certain type of entity, be in New Zealand, and meet the other requirements to report.
Types of financial institutions
The financial institution must be an entity (legal person or legal arrangement), not an individual.
There are 4 types of financial institutions covered by the CRS:
These types of financial institutions are broadly similar to FATCA. They include banks, non-bank deposit takers, holders of central bank digital currencies or specified electronic money products, collective investment entities, mutual funds, private equity funds, hedge funds, investment managers and advisors, and certain brokers and trusts (including some managed family trusts).
Non-financial entities (NFEs)
If an entity is not a financial institution, it will by default be an NFE.
There are 2 types of NFEs – active and passive NFEs.
NFEs do not have due diligence and reporting obligations. However, if they hold accounts with Reporting NZFIs, they must help those institutions with their due diligence and reporting obligations. For passive NFEs, this includes providing information about their controlling persons.
New Zealand financial institutions (NZFIs)
Financial institutions must be resident in New Zealand for CRS purposes or have a branch here to register for a CRS account. Branches located outside of New Zealand are excluded from being an NZFI.
Generally, a financial institution will be resident in New Zealand for CRS purposes if it is resident in New Zealand for tax purposes.
Special CRS residency rules
Special rules apply for financial institution trusts (other than unit trusts) and other types of institutions that do not have a tax residence.
Trusts
If a financial institution trust has a trustee that is a New Zealand tax resident, the trust is generally also resident in New Zealand for CRS purposes and reports in New Zealand.
However, if the trust reports all the CRS information to another participating jurisdiction because it is tax resident in that jurisdiction, the trust is treated as a resident in that other jurisdiction for CRS (not New Zealand).
Other entity types
Other types of financial institutions that do not have a tax residence are treated as resident in New Zealand for CRS purposes if any of the following apply.
- They are incorporated in New Zealand.
- They have a place of management in New Zealand.
- They are subject to financial supervision in New Zealand.
CRS resident in multiple countries
Except for trusts, financial institutions with more than 1 CRS residence need to report for CRS in the place where the accounts are maintained.
This means an NZFI has CRS obligations in New Zealand for accounts maintained in New Zealand and follow other participating jurisdictions obligations for accounts maintained there.
Reporting New Zealand financial institutions (Reporting NZFI)
New Zealand financial institutions will need to report for CRS (Reporting NZFIs) unless they are excluded by the CRS. Then they are non-reporting financial institutions.
If your financial institution is not required to report (or be reported on) for CRS purposes, you do not need to register for a CRS account.
Non-reporting financial institutions
Non-reporting financial institutions include:
- certain government entities and international organisations
- central banks (like the Reserve Bank of New Zealand)
- broad and narrow participation retirement funds
- pension funds of a government entity, international organisation or central bank
- qualified credit card issuers
- exempt collective investment vehicles
- low-risk non-reporting financial institutions
- trustee-documented trusts.
Trustee-documented trusts do not need to report for CRS purposes as long as they have a financial institution trustee and that trustee reports on the trust’s behalf. Trustee-documented trusts with reportable accounts need to register with us.
Apply to us to be non-reporting
The CRS allows us to exclude other low-risk entities and accounts that meet set requirements. This means these entities and/or accounts are excluded from due diligence and reporting obligations.
To be considered a 'low risk' entity or account, you must apply to us for a determination.
Send submissions to [email protected]
You can read previous determinations on our Tax Technical website.
CRS determinations (taxtechnical.ird.govt.nz)
More information
Find more information in our Guidance on the CRS for AEOI – IR1048B.
- Types of financial institutions – section 3.1
- The meaning of active and passive NFE – section 1.9
- When a financial institution is an NZFI – section 3.2
- NZFIs – section 3.3 to 3.6
- Types of entities and structures – section 11
- Non-reporting financial institutions and excluded accounts – appendices 5 and 6
Contact us
If you have questions, please email us.