Introduction to CRS Report

In a worldwide effort to protect the integrity of tax systems and combat tax evasion, the signatories to the Common Reporting Standard (CRS) regime require financial institutions (FI) with deposit taking, wealth management and custody footprints to gather and report information regarding account holders.

Once accounts are determined Reportable Accounts then the financial institutions must report information in relation to that account to the tax authority. This is the information that a jurisdiction agrees to exchange with its automatic exchange partners as specified in the CAA on an annual basis.

The reporting standard thus used is Automatic Exchange of Information (AEOI). It involves the systematic and periodic transmission of “bulk” taxpayer information by the source country to the residence country concerning various categories of income e.g. dividends, interest, royalties, salaries, pensions, etc.

This information enables the Tax Authorities about the changes of residence, the purchase or disposition of immovable property, value added tax refunds, etc. This acts as a reference to verify that taxpayers have accurately reported their foreign source income, acquisition of significant assets to evaluate the net worth of an individual and to see if the reported income reasonably supports the transaction.

Process Flow of Automatic Exchange of Information is as follows:

Configuring CRS Reporting

In Temenos Transact, reporting capability for CRS is covered under the CE module code licensing

• CE module licensing covering the AEoI Reporting Solution.

The CE module supports generation of XML reports towards CRS compliance through automatic exchange of information.

• Reporting is controlled based on high level parameter set up governing CRS Reporting.
• Base File is created to store all the required information for Reporting. Special feature to identify and report Dormant accounts separately
• Provision to amend the base file for corrections, if any
• Generation of XML Report.

Illustrating Model Parameters

Parameters configured in Model Bank are detailed below:

S.No.	Parameters	Description
1.	CRS.REPORTING.PARAMETER	Controls high-level parameters governing CRS reporting. The date on which the reporting data is required for producing the report is mentioned in this table and data are extracted on that date. Captures the number of years for which the data on base file need to be retained and also defines the directory path to hold XML messages. The Txn Code field captures the transaction code of the income to be reported, and it is mandatory when Payment Code or Payment Type has a value. The Payment Type field captures the type of payments to be reported, and it is mandatory when Payment Code or Txn Code is defined. The following are the list of allowed values: DEP.INTEREST CUS.DIVIDEND CUS.INTEREST CUS.GROSSPROCEEDS or REDEMPTION CUS.OTHER.INCOME The Payment Code field captures the payment code for the respective transaction code. It is mandatory when Payment Type or Txn Code is defined. The following are the list of allowed values: CRS501 – Dividends CRS502 – Interest CRS503 – Gross Proceeds/Redemptions CRS504 – Other CRS MAINTAIN.STATIC.INFO.COPY field enables the users to switch the functionality of maintaining a copy of static details of all the customers during the year-end processing.
2.	CRS.REPORT.BASE	A central base file is maintained for recording the information used for making disclosures. Users can retrieve the information for all reportable accounts identified from the Crs Status field in the CRS.CUST.SUPP.INFO application. This live file is updated automatically at the year end with the following details: name, address, TIN, account balances and controlling person. The ID of the file is Customer No Date. The date part indicates the date on which the base extraction is to be done based on the date or frequency setup in CRS.REPORTING.PARAMETER. All the accounts, deposits (MM/LD/AA) and portfolios are updated. Following are the exceptions: Accounts, deposits and portfolios that are specifically excluded as defined in ST.AGGREGATION.PARAM. Accounts less than the balance based on the settings in the Bal Amt Aggr From field in the CRS.PARAMETER application.
3.	CRS.BASE.MANUAL.UPDATE	This application caters the following: Updates the CRS.REPORT.BASE table automatically. Requires a provision for addition of records to the report base. Modifies existing records in the report base. Enables deletion of records in the report base.
4.	CRS.XML.REQUEST	Enables the user to place a request to generate the XML message. Once the record in the CRS.XML.REQUEST application is authorised, a work file gets updated with the CRS.REPORT.BASE keys to be considered for the XML file generation. ID of the record must be a valid customer record, a valid account officer record or only ALL. Users can mention the year for which the XML is generated. The action to be performed is specified in the Action field and the possible values are NEW, CORRECTION, VOID and AMEND. Based on action selection, the below list needs to updated in the Report Type field. OECD1 = New Data OECD2 = Corrected Data OECD3 = Deletion of Data OECD11 = New Test Data OECD12 = Corrected Test Data OECD13 = Deletion of Test Data

Illustrating Model Products

Model Products are not applicable for this module.