Common Reporting Standard FAQs

In an effort to combat cross-border tax evasion, the Organization for Economic Cooperation and Development (OECD) created the Common Reporting Standard (CRS) which over 160 participating jurisdictions have implemented through local laws since 2017. Financial institutions (FIs) have new obligations that will facilitate the automatic exchange of tax information between countries.  At a high level, the CRS calls on FIs to perform the following activities:

• Obtain self-certification from all new customers as well as existing customers whose circumstances may have changed for tax purposes.
• Annually report specified information regarding those clients and their accounts and/or transactions. This information will be reported to the local tax authority, which will forward to the national tax authority identified as having a legitimate interest in these clients, accounts, and transactions.
  

For a given account to be subject to reporting, both the account and the account holder must be reportable.  Types of accounts that are in-scope for reporting include deposit, investment, custodial accounts and other financial accounts that have cash value and/or make income payments to account holders. 

We expect the vast majority of our clients will not be reportable. We will be asking all new customers (and existing customers when opening additional in-scope accounts) to complete “self-certifications” attesting to their tax residencies.

If a pre-existing personal or business customer (i.e., existing prior to CRS implementation) has foreign indicators^[i], has had a chance of circumstance, or is a business whose assets are largely financial investments, we will request the customer to complete a “self-certification” form.  Reportable customers will be those that self-certify as having foreign tax residencies; it will also include customers that do not complete self-certifications when requested.

We ask all new personal clients (individuals) to complete a self-certification to attest as to their tax residencies, i.e., where they have a tax obligation.   We will then review the information you provide to determine whether or not your accounts are reportable.  If you fail to provide a completed self-certification, the Bank may not be able to open an account for you.

We ask all business clients (non-personal) to self-certify as to their tax residencies, and the tax jurisdictions of their controlling persons for certain investment and trust entities.  If the entity information you provided before CRS implementation indicated that reporting may be required for the entity accounts, we also asked you to complete a self-certification form. A review of the information you provided will determine whether the entity’s accounts are reportable.

Self-certifications are required from all new and existing customers opening in-scope accounts, pre-existing customers who have foreign indicators or who’s circumstances have changed, and business customers of certain investment and trust entity types, as well as when customers introduce new foreign indicators such as a foreign address.  Customers will attest to their tax residencies at onboarding or by completing the self-certification form.

• On the self-certification form for an individual, the customer completes:
  o  name and residence address
  o   jurisdiction(s) of residence for tax purposes
  o   Tax Identification Number (TIN) issued by each jurisdiction of tax residence;
  o   No TIN reason code, if applicable, and
  o   Date of birth.
  
  
• On the self-certification for an entity (non-personal), the customer completes the entity’s:
  o   name and address
  o   jurisdiction(s) of residence for tax purposes for the entity
  o   TIN issued by each jurisdiction of tax residence
  o   Name(s) of controlling person(s) for certain investment and trust entity types, and
  o   TIN issued by each jurisdiction of tax residence for controlling persons for certain investment and trust entity types
  o   No TIN reason code, if applicable

The information we report to the local tax authority includes the following:

• Name and address
• Tax Identification Number (TIN)
• Account Balance
• Payments to the reportable account earned over the year including dividends, interest, gross proceeds and other income

While we can provide general information regarding CRS (such as that contained in this FAQ), we are not permitted to provide tax advice.  You are encouraged to go to www.OECD.org for further information and/or speak with a professional tax advisor.

CRS takes effect once the local country passes legislation and issues supporting regulations.  In some countries, CRS became effective January 1, 2016 (known as “Early Adopter” countries), in others, CRS became effective January 1, 2017 (known as “Late Adopter” countries), and finally in Canada and Australia on July 1, 2017.  The list of these countries may be found at www.OECD.org.

FIs within countries that are participating in CRS are required to comply once local legislation is passed.  In all countries where Scotiabank operates and that integrated CRS into local banking and tax regulations, Scotiabank intend to meet all resulting legal obligations.

While the requirement to self-certify tax residencies was a new requirement introduced by CRS, Scotiabank has complied for many years with the various longstanding tax treaties in its countries of operation that impose customer tax reporting obligations on the Bank.  CRS builds on these existing customer tax reporting obligations.

Scotiabank is required to comply with CRS customer tax reporting requirements in countries that participate in CRS.  That being said, Scotiabank has a policy of strict adherence to privacy legislation and protection of client data. 

Much like other information about yourself that you are required to provide today (e.g., full name, identification, address, occupation, date of birth and place of business formation), CRS introduced the new obligation of also providing your tax residency information and associated TIN.   If you do not provide a completed self-certification form, we will not be able to open an account for you, as per the Canada’s Income Tax Act.  You may also be subject to penalties imposed by CRA.

CRS includes deposit, investment (e.g., GICs), custodial (e.g., brokerage) accounts, as well as other financial accounts that have cash value (e.g., certain insurance contracts) or provide the customer with income payments. 

We assess each account holder individually.  If an account holder is found to be reportable, then the account holder is reported as if he/she held the entire account in single name. 

Documentation provided for U.S. FATCA may not be sufficient for the purpose of CRS.  When CRS related documentation is required, we will advise you of the requirements. 

You may be contacted by more than one business area regarding this documentation, due to different computer systems and processing procedures. We apologize for any inconvenience, and we appreciate your patience.

Detailed information on CRS is available at www.OECD.org