KPMG International has signed the Multilateral Competent Authority Agreement (MCAA) on implementation of the automatic exchange of information standard.
“The groundbreaking agreement by the signatory jurisdictions to automatically exchange tax information under the Organisation for Economic Co-operation and Development’s (OECD’s) Common Reporting Standard (CRS), is yet another step towards global transparency in tax affairs,” according to Greg Wiebe, global head of tax, KPMG International.
KPMG International signed the MCAA at the 7th meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes in Berlin, Germany.
“Implementation of the multilateral competent authority agreement will impose complex new due diligence and automatic reporting requirements on financial institutions doing business in the signatory jurisdictions,” Wiebe added.
“In response, beginning in 2016, these institutions will need to implement new customer on-boarding processes, gather new information and documentation on existing account holders, and put in place systems to report required information to the proper government entities. Equally important, non-financial multinationals will also need to determine their status under the CRS and how they are affected.”
The Standard for Automatic Exchange of Financial Account Information in Tax Matters calls on governments to obtain detailed account information from their financial institutions and exchange that information automatically with other jurisdictions on an annual basis.
The Standard was developed at the OECD under a mandate from the G20, endorsed by the G20 Finance Ministers in February 2014, and approved by the OECD Council.
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The Global Forum on Transparency and Exchange of Information for Tax Purposes is the world’s largest network for International cooperation in the field of taxation and financial information exchange, bringing together 122 countries and jurisdictions plus the European Union.
Jennifer Sponzilli, a principal with KPMG’s U.S. international tax team in the U.K., said: “The Common Reporting Standard and attendant commentary provides guidance to financial institutions in the signing jurisdictions about the scope of the due diligence and reporting obligations that will apply in those jurisdictions.”
Iheanyi Nwachukwu
