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Account holders and controlling persons

This page explains who account holders and controlling persons are and what they may need to do.

Customers and people controlling accounts with financial institutions

New Zealand has made international commitments with foreign jurisdictions to implement the automatic exchange of information (AEOI) about foreign tax residents, under the Common Reporting Standard (CRS).  This may affect you as a customer of a financial institution or as a person who controls an account with a financial institution.

From 1 July 2017, Reporting New Zealand financial institutions (NZFIs) must carry out due diligence on their financial accounts to identify accounts held and/or, in certain circumstances, controlled by relevant foreign tax residents.

If you hold or control an account with a Reporting NZFI they may ask you to self-certify your country or countries of tax residence and/or ask you to provide supporting forms, documentation, and other information.

In certain circumstances, the Reporting NZFI will ask for information about the account holder’s controlling persons as well. You can find out about when this could happen in section 1.9 of the Inland Revenue Guidance on the CRS.

Guidance on the CRS for AEOI (IR1048)

If the account is reportable, the Reporting NZFI will report annually to us the prescribed identity and financial account information about:

  • the account
  • any account holders identified as being relevant foreign tax residents, and
  • in certain circumstances, any controlling persons identified as being relevant foreign tax residents. These circumstances are summarised at section 1.9 of the Inland Revenue Guidance on the CRS.

The reported information includes:

  • identity information - foreign Taxpayer Identification Number (TIN) or equivalent, date of birth, and
  • financial information - account balance, income, and payment information.

We will then exchange this information with the relevant person's jurisdiction of tax residence if New Zealand has entered into an AEOI agreement with them. You can find out more about what information will be reported in sections 5.6.5, 6.1, 6.2 and 7 of the Inland Revenue Guidance on the CRS.

Guidance on the CRS for AEOI (IR1048)

Find out more about your AEOI obligations if you hold or control financial accounts

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Who an account holder is

The general rule is that a Reporting NZFI should treat a person as an account holder if that person is listed or identified as holding the account (including both persons for joint accounts).

However, this is subject to a trace-through rule that applies where the account is held by a person (other than a financial institution) on behalf of another person such as agent, custodian, nominee, signatory, investment advisor, or intermediary. In these cases, that "other person" would be the account holder.

The CRS Commentary clarifies how the "account holder" definition applies for estates, trusts and partnerships, and states that:

  • if a trust or an estate is listed as the holder or owner of a financial account, the trust or estate is the account holder, rather than its owners or beneficiaries, and
  • if a partnership is listed as the holder or owner of a financial account, the partnership is the account holder rather than the partners of the partnership.

You can find this at page 200 of the CRS Commentary.  You can also find more information in sections 1.7 and 1.8 of the Inland Revenue Guidance on the CRS.

Go to the Common Reporting Standard (Second edition) on the OECD's Automatic Exchange Portal

Guidance on the CRS for AEOI (IR1048)

Go to the New Zealand CRS Applied Standard
PDF | 450kb | 22 pages

If you're an individual with a pre-existing account

If you have a pre-existing financial account with a Reporting NZFI, as at 30 June 2017, they may contact you to confirm your country or countries of tax residence. This may be because you provided an address or other information for a country outside New Zealand. They may ask for documentation and other information to help them determine whether you are a foreign tax resident.

If you're identified as being a foreign tax resident, you will need to provide your date of birth and foreign taxpayer identification number (TIN) or an equivalent. Your foreign TIN will be the equivalent of your New Zealand IRD number in that foreign jurisdiction. If you don't have a foreign TIN you will be asked to provide a reason. See "Tax Identification Numbers (TINs)" below.

You can find out more about what information will be reported in section 5.3 of the Inland Revenue Guidance on the CRS.

Guidance on the CRS for AEOI (IR1048)

If you're an individual opening a new account

From 1 July 2017, your Reporting NZFI must generally ask you to self-certify your country or countries of tax residence when opening a new account. They may also ask you to provide documentation and other information to support this. This is to establish whether you have accounts that must be reported under the CRS.

If you're a foreign tax resident, you will need to provide your date of birth and foreign TIN or an equivalent. Your foreign TIN will be the equivalent of your New Zealand IRD number in that foreign jurisdiction. If you don't have one, you will be asked to provide a reason. See "Tax Identification Numbers (TINs)" below.

Find out more about jurisdictions committed to CRS

If you're a company, trust, partnership, or other entity associated with a pre-existing account

A pre-existing entity account is an account maintained by a Reporting NZFI, as of 30 June 2017, that is held by an entity (for example by a trust, company or partnership).

Reporting NZFIs are generally required to conduct due diligence on these pre-existing entity accounts to determine:

  • whether the entity is a relevant foreign tax resident
  • whether the entity is a passive non-financial entity (NFE) - generally covers an entity that is not a financial institution and that derives its gross income mainly from passive income and/or has mainly passive assets, and
  • if the entity is a passive NFE, whether it has any controlling persons that are relevant foreign tax residents.

If you hold a pre-existing entity account on behalf of such an entity, the Reporting NZFI may contact you to ask for this information. You can find out more about pre-existing entity accounts in section 5.5 of the Inland Revenue Guidance on the CRS. Alternatively, if the entity is a passive NFE, the Reporting NZFI may sometimes choose to directly ask the controlling persons whether they are relevant foreign tax residents.

Guidance on the CRS for AEOI (IR1048)

If you're a company, trust, partnership, or other entity associated with a new account

If you are opening a new account with a Reporting NZFI on behalf of a legal entity, eg a company, or an arrangement, such as a trust or partnership, from 1 July 2017 generally the NZFI must ask you for information about:

  • whether the entity is a relevant foreign tax resident
  • whether the entity is a passive NFE - generally covers an entity that is not a financial institution and that derives its gross income mainly from passive income and/or has mainly passive assets), and
  • if the entity is a passive NFE, whether it has any controlling persons that are relevant foreign tax residents. You can find out about when this could happen in section 1.9 of the Inland Revenue Guidance on the CRS. Alternatively, if the entity is a passive NFE, the Reporting NZFI may sometimes choose to directly ask the controlling persons whether they are foreign tax residents.

You can find out more about new entity accounts in section 5.6 of the Inland Revenue Guidance on the CRS. 

Guidance on the CRS for AEOI (IR1048)

If the Reporting NZFI identifies that the entity and/or an individual controlling person is a relevant foreign tax resident they will ask for their foreign TIN (or equivalent) and the individual’s date of birth.

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Responding to requests for information

You may be asked by your financial institution to provide information to assist that institution in carrying out its CRS due diligence and reporting. If you do not hold an account with an institution, but, instead, control the account this request may come through the account holder who will then provide this information to the institution.

It is important that you provide accurate information when requested and update it if there is a material change within a reasonable time.

This includes taking reasonable steps to obtain and provide information about any persons that you hold an account for.

If you don't respond to these requests for information, your financial institution may have to treat you as if you are a tax resident in a jurisdiction outside New Zealand, even if you are not. If you intend to open a new account and do not provide the relevant details, the financial institution must not open the account for you.

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.

Find out more about penalties that may apply

Important note about CRS and FATCA

The obligations to provide information also extend to FATCA as well as the CRS. Your financial institution will ask you to provide similar information for the purposes of FATCA.

Find out more about FATCA

Tax Identification Numbers (TINs)

If you are identified as being a foreign tax resident, you will need to provide your date of birth and foreign taxpayer identification number (TIN) or an equivalent. This is the number used to identify you to the tax authority in the foreign jurisdiction. If you don't have a TIN (or an equivalent), you will be asked to provide a reason.

However, there is an exception to this TIN requirement that can apply if you are tax resident in a country that does not require the collection of the TINs they issue.

Find out more about TINs and tax residency rules for implementing jurisdictions on the OECD website

Find out more about the jurisdictions committed to the CRS