FATCA & CRS

Challenges of FATCA & CRS

The Foreign Account Tax Compliance Act (FATCA) was passed in the United States to promote tax transparency. Though there is a considerable amount of ambiguity how to advise high net worth clients on compliance, bankers should prepare themselves with proper training, and stay involved with knowledgeable networks.

The Common Reporting Standard (CRS) has recently spurred debates in the Asian wealth management realm. This new regulation burdens advisors and practitioners with deadlines, paperwork, etc. Officially known as the Standard for Automatic Exchange of Financial Account Information, CRS arose from the OECD.

There are three main issues with CRS. To start, the documents do not directly state what should be reported or what is reportable. The second issue is that participating countries are burdened with the process of reporting foreigners’ investments and earnings. The last difficulty is the United States passed this law with hopes of applying it to the rest of the world. This act has been seen by foreign governments as an intrusion on their autonomy.