Overseas Held Bank Accounts
Globalisation has made it easier for people to invest money outside their tax residence jurisdiction. This has provided opportunities for offshore tax evasion. New Zealand is one of many jurisdictions that has committed to a global initiative led by the Organisation for Economic Co-operation and Development (OECD) on the automatic exchange of financial account information using the CRS.
This information is required by law to be collected by financial institutions around the world for reporting to tax authorities. Tax authorities will exchange this information to ensure everyone pays the right amount of tax. Tax pays for services we all need and to improve the communities we live in.
Just a reminder that IRD receives automatic exchange from offshore jurisdictions of financial bank accounts held off shore. Inland Revenue commenced this automatic exchange September 2018 and continues to receive financial account information on New Zealand Tax residents and will will do so each year going forward.
The CRS is a global framework for the collection, reporting, and exchange of financial account information about people and entities investing outside of their tax residence jurisdiction.
The CRS and a comprehensive commentary along with other information about AEOI are available on the OECD's automatic exchange portal. The CRS and the related commentary have been introduced into New Zealand law.
The CRS applies from 1 July 2017 to financial institutions, account holders and certain other people who control accounts.
What this means for account holders and certain controlling persons
If you hold an account with a financial institution (or if you hold an account for the benefit of another person) you may be asked to provide documentation and other information to assist that institution to carry out their due diligence and reporting obligations. This is required so that the financial institution can determine whether you are a foreign tax resident (or the person that you hold the account for is a foreign tax resident).
It is important that you provide accurate information when requested and update the information if there is any material change within a reasonable timeframe. This includes taking reasonable efforts to obtain and provide information about any persons that you hold an account for.
Penalties may apply if you provide false or misleading information, fail to provide this information, or fail to provide an update if there is any material change to the information you have provided. S
Tax reporting
You need to ensure that you keep us advised about your foreign bank accounts so that we can report any required tax requirements and income from these accounts.
