The full name of CRS is Common Reporting Standard.
The Common Reporting Standard (CRS) is an information standard for automatic exchange of financial account information (AEOI) on a global level. It was developed in response to the G20 request and approved by the OECD Council on 15 July 2014. Its purpose is to combat offshore tax evasion and improve tax compliance.
Here's a breakdown of what the acronym stands for:
- Common: Indicates that this reporting standard is used by multiple countries.
- Reporting: Emphasizes the core function of financial institutions needing to report specific information.
- Standard: Signifies a uniform set of rules and procedures.
The CRS requires financial institutions in participating countries to report financial account information of tax residents of other participating countries to their local tax authority, which then exchanges that information with the tax authorities of the relevant countries. This helps tax authorities identify individuals who may be using offshore accounts to avoid paying taxes in their home countries.
