CRS & FATCA

Understand your obligations under international tax reporting standards and compliance requirements.

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International tax reporting standards explained. The Act came into force on 1 September 2011 and provides a three-strike regime to prevent unauthorised file sharing on the net.

CRS and FATCA are mandatory frameworks that govern how financial institutions report client information across borders. These standards ensure transparency in international finance and require careful attention to detail.

Both standards demand financial institutions identify and report accounts held by foreign tax residents.

Non-compliance carries serious penalties and can damage your financial standing across multiple jurisdictions.

Reporting Obligations

Annual reports must be filed with tax authorities detailing accounts held by foreign residents.

Client Impact

Your financial information may be exchanged with your home country's tax authority automatically.

Due Diligence First

Financial institutions must verify client identities and tax residency status with proper documentation.

Frequently Asked Questions

  • FATCA is the Foreign Account Tax Compliance Act, a U.S. law requiring financial institutions to report accounts held by U.S. persons. It applies to banks, investment firms, and other entities worldwide. New Zealand financial institutions must comply with these reporting standards.

  • The Common Reporting Standard is a broader international framework adopted by over 100 countries. While FATCA focuses on U.S. tax compliance, CRS requires automatic exchange of financial information between nations. Both standards demand similar due diligence from financial institutions.

  • Financial institutions in New Zealand, including banks and investment firms, must comply with both standards. Individuals with offshore accounts or foreign financial interests may also have reporting obligations. Your specific requirements depend on your residency status and account types.

  • You'll need to provide proof of tax residency and complete self-certification forms. Documentation varies depending on your jurisdiction and account classification. Mactodd Lawyers can guide you through the specific requirements for your situation.

  • Non-compliance can result in significant penalties from tax authorities in multiple jurisdictions. Financial institutions face substantial fines for failing to report properly. Staying compliant protects both you and your financial institutions from enforcement action.

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