Consider these 12 questions each year to make sure your financial institution’s Common Reporting Standard (CRS) systems are fit for purpose.
Governance and oversight
Make sure your organisation has the right oversight, processes, and people in place to manage CRS reporting effectively.
1. Governance: does your enterprise-wide tax governance process cover the CRS system well enough, including reporting to senior management or the board of directors?
2. Policies and controls: are your CRS policies, procedures and controls documented fully and periodically tested or reviewed for any changes that have taken place?
3. Training and expertise: have you maintained technical training (especially of new staff members with responsibilities relating to CRS work) and kept subject matter experts to answer the more difficult issues that come up?
4. Key person risk: do you have back-up plans where there is considerable reliance placed on 1 or 2 key individuals?
Quality controls and recordkeeping
Make sure you have controls in place and keep records to meet your CRS obligations.
5. Outsourcing controls: do you maintain quality controls when CRS system functions are outsourced offshore, especially since New Zealand financial institutions have ultimate responsibility for complete and accurate CRS record-keeping, due diligence, and reporting?
6. Record keeping: do you keep documentation of steps taken and evidence relied upon for CRS due diligence procedures, including the identification and actions taken in respect of false certifications?
Due diligence and reporting
Make sure you’re collecting the right information, keeping it up to date, and reporting it correctly.
7. Self-certifications: do you get self-certifications every time a new account is opened and confirm they are reasonable?
8. Monitoring changes: are you still monitoring effectively for changes in circumstances in relation to the identity or reportable status of account holders and/or controlling persons?
9. Required customer data: are you collecting tax identification numbers (TINs), dates of birth (DoBs) and full addresses for account holders (and controlling persons) as well as making reasonable efforts to collect TINs and DoBs not already in your records for pre-existing accounts?
10. Trust classification: are trusts (including family trusts) properly classified and reported (including the reporting of account holders and controlling persons of the trust)?
You can find out more in our guides: Is the trust a Reporting NZFI under CRS? - IR1052 and Family trust obligations under the CRS - IR1053.
11. Undocumented accounts: are undocumented accounts properly classified, reported and reducing in volume?
Risks with new accounts
12. Circumvention risks: are you keeping a watchful eye for potential CRS circumvention arrangements when opening a new account, such as the misuse of citizen/residence by investment schemes?
Finding issues with your reporting
If you identify deficiencies in your CRS reporting, we can work with you to fix the issue. Email us at [email protected]
If we begin compliance activities and find material errors or omissions, we will seriously consider charging penalties.