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Mohammad fheili on_crs
The document discusses the Common Reporting Standard (CRS) as a tool designed to combat tax evasion and enhance tax compliance through automatic information exchange between participating jurisdictions. It outlines the legal framework, implementation requirements, and administrative responsibilities of financial institutions in relation to tax reporting and due diligence, while also highlighting the shift in the banking model and the implications for both surplus and deficit spending units. Furthermore, it addresses Lebanon's current status as a CRS participant and the challenges related to guidance and compliance in the context of tax residency and reportable accounts.
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Mohammad fheili on_crs
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- 2. WeSpeakYourLanguage… Jammal Trust Bank Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist اﻟﺘﺄﺛﻴﺮ ﻋﻠﻰ اﻟﻮداﺋﻊ Double TaxationTax Evasion Impact on Deposits اﻟﺘﻬﺮب اﻟﻀﺮﻳﺒﻲ اﻹزدواج اﻟﻀﺮﻳﺒﻲ CRS is intended to be an effective tool to counter Tax Evasion and to increase & improve voluntary Tax Compliance… CRS is a Tool made available in the Hands of the “Conduit of Monetary Policies” – i.e., Financial Institutions – to assist Fiscal Authorities! DeemedCriminal! ByAllJurisdictions… BusinessImplications! Jurisdiction-andInstitution-Specific dependingonthevolumeofReportable Accounts… ContractualMiscalculations! BetweenTwoParticipating Jurisdictions,andmustbe corrected… It may change the Banking Model with more reliance on Borrowing (instead of Deposits) for Funding – Active Money Market! And/or Shadow Institutions/Transactions…
- 3. WeSpeakYourLanguage… Jammal Trust Bank Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist Borrowers Deficit Spending Units ‐DSUs •Individuals (Current Income is LESS than Current Expenditures) • Firms (Earnings falls short of what the firm needs currently) • Government (Current Revenues fall short of planned Expenditures) • Financial Intermediaries (Funding is currently LESS than investment) Lenders Surplus Spending Units ‐SSUs • Individuals (Current Income is GREATER than Current Expenditures) • Firms (Earnings in excess of what the firm needs currently) • Government (Current Revenues are in excess of planned Expenditures) • Financial Intermediaries (Funding is currently GREATER than investment) WhereWill SSUswarehouse theirSurplusesofFund? Shadow Banking (Non-Reportable Institutions Banks (ReportableInstitutions) Financial Markets (NotallareReportable Institutions) NOTSubjectTo: FATCA CRS OtherAMLRules SubjectTo: FATCA CRS OtherAMLRules Stocks Bonds OtherInstruments BankingModel
- 4. WeSpeakYourLanguage… Jammal Trust Bank Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist Reference: •http://www.oecd.org/tax/automatic‐exchange/common‐reporting‐ standard/ • http://www.oecd.org/tax/automatic‐exchange/crs‐implementation‐ and‐assistance/crs‐by‐jurisdiction/
- 5. WeSpeakYourLanguage… Jammal Trust Bank Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist Disclaimer: Thejurisdiction‐specific information published on the OECD AEOI Portal do not necessarily reflect the views of the OECD. While the AEOI Portal is run by the OECD, each jurisdiction is responsible for its jurisdiction‐specific content and links to its own pages. Further: The Information in this section is of a general nature only and not intended to address the specific circumstances of any particular individual or entity, The Information in this section is not necessarily comprehensive, complete, accurate or up to date, The Information in this section is sometimes linked to external sites over which the OECD has no control and for which the OECD assumes no responsibility, and The Information in this section is not professional or legal advice. If you need specific advice, you should always consult a specialist.
- 6. WeSpeakYourLanguage… Jammal Trust Bank Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist LegalFramework Tax Residency,Tax Evasion, Double Taxation, ... ITPlatform:Technical Framework FinancialInstitutions: Administrative Framework Jurisdiction “A” The legal framework for the collection and exchange of information will be ONLY between “Participating Jurisdictions,” and it’s only a part of the framework when it comes to implementing the CRS Standard. Tax administrations also require technical and administrative capacity to properly manage the information (whether sending or receiving data). It is important to consider these requirements early in the implementation process to ensure adequate resources are put in place by the time of exchange. AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders Jurisdiction “B” Sending ….. ….. Receiving ConduitofMonetary Policies UnderCRS:Conduit ofFiscalPolicies!? Legal Framework Tax Residency,Tax Evasion, Double Taxation, ...
- 7. WeSpeakYourLanguage… Jammal Trust Bank Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist LegalFramework Tax Residency,Tax Evasion, Double Taxation, ... ITPlatform:Technical Framework FinancialInstitutions: Administrative Framework Jurisdiction “A” The Four Core Requirements To Implement CRS: 1. Translating the reporting and due diligence rules into domestic law, including rules to ensure their effective implementation. 2. Selecting a legal basis for the automatic exchange of information. 3. Putting in place Information Technology (IT) and Administrative infrastructure and resources. 4. Protecting Confidentiality and safeguarding data. AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders Jurisdiction “B” Sending ….. ….. Receiving ConduitofMonetary Policies UnderCRS:Conduit ofFiscalPolicies!? Legal Framework Tax Residency,Tax Evasion, Double Taxation, ...
- 8. WeSpeakYourLanguage… Jammal Trust Bank Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist LegalFramework Tax Residency,Tax Evasion, Double Taxation, ... ITPlatform:Technical Framework FinancialInstitutions: Administrative Framework Jurisdiction “A” Jurisdiction “B” Sending ….. ….. Receiving Legal Framework Tax Residency,Tax Evasion, Double Taxation, ... 1. Collecting and reporting the information: • The Format to report the data is decided by the Tax Administration. • Will There Be Transmission and encryption standards? Who sets these Standards. 2. Receiving the information to send: • Operational Security. • Who Validates the data? • Restricted Use of the data. 3. Sending the information: • Sorting the data. • The format to exchange data • Will There Be Transmission and encryption standards? Who sets these Standards. 4. Receiving the information: • Operational Security. • Restricted Use of the data. Every CRS Participating Jurisdiction is on the Sending & Receiving Ends simultaneously.
- 9. WeSpeakYourLanguage… Jammal Trust Bank Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist Jurisdiction“A”TaxAdministration ConfidentialityandDataSafeguard RequirementsinPlace. Jurisdiction“B”TaxAdministration ConfidentialityandDataSafeguard RequirementsinPlace. InformationReporting in relation to Tax Residents of jurisdiction “B”, in accordance with Jurisdiction “A”’s domestic reporting requirements. Information Reporting in relation to Tax Residents of jurisdiction “A”, in accordance with Jurisdiction “B”’s domestic reporting requirements. ITPlatform ITPlatform Jurisdiction“A”Financial Institutions Jurisdiction“B”Financial Institutions Information Exchange, in accordance with the underlying legal instrument and the Competent Authority Agreement between Jurisdictions A & B Jurisdiction “A” Jurisdiction “B” Account Holders are Individuals & Entities AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders
- 10. WeSpeakYourLanguage… Jammal Trust Bank Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist FATCAParticipating Countries MonetaryAuthority FinancialInstitutions FiscalAuthority USFiscalAuthority Financial Institutions (FIs) are required to report Directly to US Tax Authority on Reportable Accounts. The Burden of proof is on the FI, and the FI is held accountable, by US Tax Authority, for “Non-Compliance”. Due Diligence is required. The FI, in a non-US Jurisdiction, is deemed Non-Compliant by the US Tax Authority. Scope: Any country where there can be a FATCA Reportable Account. The Monetary and Fiscal Authorities, in “FATCA Participating Countries”, play no party to all this! AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders
- 11. WeSpeakYourLanguage… Jammal Trust Bank Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist CRSParticipating Countries MonetaryAuthority FinancialInstitutions FiscalAuthority OECD:CRSParticipatingTaxAuthority C.R.S.AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders Financial Institutions (FIs) in participating Jurisdictions are required to report to own-Jurisdiction Tax Authority on Reportable Accounts. The Burden of proof of “Tax Residency” is on the Account Holder. Due Diligence is required by the FI. The Account Holder is responsible to provide the FI accurate, updated and complete information about his/her/its (Entities) Tax Residency. The FI is deemed Non-Compliant by its own Tax Authority! Or … ? Scope of CRS Reporting by FI: on any Account Holder who is a Tax Resident in one (or more of the) CRS Participating Countries; except its own – A Lebanese FI does not Report on strictly Lebanese Tax Payers under CRS. The Monetary Authorities, in the CRS participating countries, play no party to all this!
- 12. OECD Member Country MonetaryAuthority FinancialInstitutions FiscalAuthority OECD:CRSParticipatingTaxAuthority C.R.S. Whatis the role of Own Jurisdiction Tax Authority in case of Non-Compliance? Has Non- Compliance Been Clearly Defined? How will the issue of non-compliance be addressed? Failure To Report on Tax Residents! Be it: • Intentional? • Unintentional? Failure To Report on Tax Evaders! Be it: • Intentional? • Unintentional? Failure To Report Due to Account Holder’s Failure to effectively & Accurately report Tax Residency! AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders AccountHolders CRS shall blur the dividing lines between Tax Evasion (illegal) and Tax Avoidance (legal)!
- 13. WeSpeakYourLanguage… Jammal Trust Bank Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist ComplianceRequirements • The Standard requires effective administration by participating jurisdictions which must have: • Rules to prevent any Financial Institutions, persons or intermediaries from adopting practices intended to circumvent the reporting and due diligence procedures. • Rules requiring record retention and evidence of performance of due diligence and reporting. (Effective legislation) • Administrative procedures to verify compliance by Financial Institutions. (Program of compliance activity by Ministry of Finance) • Effective enforcement provisions to address non‐compliance. (Penalties for non‐compliance)
- 14. WeSpeakYourLanguage… Jammal Trust Bank Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist Lebanon… A CRS Participating Jurisdiction • Yes / Committed to first exchange in 2018 • Yes / Passed Primary and Secondary Legislation • No / Guidance (on how to identify Tax Residency and CRS Compliance) has not been released. • No / List of low risk non‐reporting Financial Institutions and excluded accounts have not been released. • No / Domestic Reporting Format has not been communicated. Source: OECD Website August 17th, 2017 @ 4:30pm
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- 18. WeSpeakYourLanguage… Jammal Trust Bank Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist MyFear is that the only Crime which matters in this new era of AML Compliance is going to be “Tax Evasion”…
- 19. WeSpeakYourLanguage… Jammal Trust Bank Mohammad Ibrahim Fheili / Risk & Capacity Building Specialist WithFATCA and CRS, the Burden of Tax Collection and Tax Compliance have landed on the back of Financial Institutions (FIs) and rendered those FIs effective Conduits of Fiscal Policies Instead of staying busy doing what they do best – Conduits of Monetary Policies.