Guernsey Aligns Interest Reporting Rules With CRS
by Jason Gorringe, Lowtax.net, London
27 December, 2016
Guernsey is to align its reporting requirements placed on the banking sector with the provisions of the OECD's Common Reporting Standard.
The Common Reporting Standard is the single global standard for collecting, reporting, and exchanging financial account information on foreign tax residents. Under the Standard, Guernsey banks and other financial institutions are required to collect financial account information on non-residents and report this to Guernsey's income tax office, to make it available, where necessary, to international partners..
The Government said to minimize compliance costs for financial services businesses and to recognize that many banks operate across both Jersey and Guernsey, the timing of the new reporting requirement will be aligned with similar changes being undertaken in Jersey. This will be achieved through joint engagement by the tax offices in both islands with industry.
To provide clarity to banks and to enable them to prioritize their resources appropriately, Guernsey's Government has said that the island's Director of Income Tax will not require reporting of any interest paid or credited by banks to an individual resident in Guernsey for any calendar year preceding 2017. Individuals will remain responsible for reporting any interest received in their personal tax returns, subject to a GBP50 (USD52) exemption.
Guernsey's Government has also clarified that the Director of Income Tax will not seek to impose penalties in the event that a "Tax Identification Number" - a term used in the Common Reporting Standard - has not been obtained for accounts established by individuals' tax resident in Guernsey prior to December 31, 2016. For Guernsey residents, the Tax Identification Number is their social security number.
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