The Common Reporting Standard For Taxation

[Davita]

Davita, while what you say may all be true, I think you miss the point. This is about collecting tax owed under Double tax agreements.

I haven't missed the point but you are bringing up an argument you need to substantiate.
No Government is going to hand over to any other government ALL details of their tax payers info...the CRS is there to permit a government to request tax info from another government if there is suspicion and they will surely only do that when there is a strong indication of nefarious activity.
I think you are scare-mongering that the average person is somehow going to be investigated in case, as myself, a pension is paid into one jurisdiction and another wants to tax....imo not worth the time and effort unless substantial sums are involved.

"The Common Reporting Standard (CRS) is a global standard for the automatic exchange of financial account information. It was developed by the Organisation for Economic Cooperation and Development (OECD) and has been designed to prevent offshore tax evasion.
Applicable for individuals and legal entities, it aims to give participating countries transparency on the financial assets that residents hold offshore.
CRS requires financial institutions to identify customer tax residencies and report to local tax authorities financial accounts held directly or indirectly by foreign tax residents. It also requires those tax authorities (in participating countries) to exchange this information."

 

[brian@bekasi]

Davita, while what you say may all be true, I think you miss the point. This is about collecting tax owed under Double tax agreements.

The reality about the CRS is that banks tell governments about customers then Government transfer the names of people and incomes to other countries where they have a possible tax liability. It is up to the government receiving the data (in this case Indonesia) to then recover any taxes that are due.

As previously stated the Australian government will start giving other governments data on 30 September 2018. If you ignore any information requests you will be added to the list sent to Indonesia. If you talk to your bank you may still be added to the list depending on circumstances.

I do not have a crystal ball to predict what the Indonesia Government will do with the data but they will have your name and how much you earned in another country. I do note that the Indonesian Finance Minister has talked about the introduction of the CRS in the past so it on the Indonesian radar.

Those of us who have tried to keep low key in the past may not be able to because of the data that the Indonesia Government will hold. Simple as that!

Those who have no tax file number, may be asked to explain why not if they have other world wide income. Those who do, may be question if they have not reported income.

I have held relatively senior government positions for many years and I can say that if a government has a persons name and know they are possibly non compliant they will eventually investigate.

I should note that a number of countries starting reporting in 2017 and a number of countries including UK, US, Indonesia and Australia start reporting in 2018.

 

[Edward]

I haven't missed the point but you are bringing up an argument you need to substantiate.
No Government is going to hand over to any other government ALL details of their tax payers info...the CRS is there to permit a government to request tax info from another government if there is suspicion and they will surely only do that when there is a strong indication of nefarious activity.
I think you are scare-mongering that the average person is somehow going to be investigated in case, as myself, a pension is paid into one jurisdiction and another wants to tax....imo not worth the time and effort unless substantial sums are involved.

"The Common Reporting Standard (CRS) is a global standard for the automatic exchange of financial account information. It was developed by the Organisation for Economic Cooperation and Development (OECD) and has been designed to prevent offshore tax evasion.
Applicable for individuals and legal entities, it aims to give participating countries transparency on the financial assets that residents hold offshore.
CRS requires financial institutions to identify customer tax residencies and report to local tax authorities financial accounts held directly or indirectly by foreign tax residents. It also requires those tax authorities (in participating countries) to exchange this information."

I certainly am not trying to scare anyone. I am of the opinion that some people who have considerable assets and income in more than one jurisdiction may face considerable back taxes and fines. Obviously, those not in this category have absolutely nothing to fear. Tax evasion, deliberate or through ignorance, would probably qualify as nefarious.

 

[R Cameron]

I should note that a number of countries starting reporting in 2017 and a number of countries including UK, US, Indonesia and Australia start reporting in 2018.

The Wikipedia page on CSR indicates the US has not signed onto the agreement. It does mention things about the US already doing some sharing, but it sounds as though nothing has changed last year or will change this year.

 

[brian@bekasi]

I think you are scare-mongering that the average person is somehow going to be investigated in case, as myself, a pension is paid into one jurisdiction and another wants to tax....imo not worth the time and effort unless substantial sums are involved.

I started the post and not Edward. The purpose was update members on an issue discussed on the forum in the past. It was certainly not to scare-mongering.

Everybody's circumstances are different so it may impact on some and not others. By informing the members, they can do there own research and find out if it impacts upon them.

I would hope that pensions are exempted. In Australia you are considered a resident for tax purposes if you get a government pension. However when you get a pension from a superannuation fund it is subject to different rules. I get both so I need to have a discussion with my bank on reporting status.

 

[brian@bekasi]

The Wikipedia page on CSR indicates the US has not signed onto the agreement. It does mention things about the US already doing some sharing, but it sounds as though nothing has changed last year or will change this year.

I took the information about the US starting in 2018 from the ATO (Australian Tax Office) file. In Trump World things charge daily so the ATO information may or may not be correct.

 

[Davita]

I started the post and not Edward. The purpose was update members on an issue discussed on the forum in the past. It was certainly not to scare-mongering..

You may have started the thread but in NO way did I respond to you so better read before you utter and quote me.
My response (#21), by using the reply function, was clearly to Edward.

edit: The CRS reporting system is a follow-on and similar to the USA FATCA system which has been in existence since 2010....
https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act

I haven't heard of any ordinary USA citizen been subject to inquiry unless some suspicious activity has been reported.

 

[brian@bekasi]

You may have started the thread but in NO way did I respond to you so better read before you utter and quote me.
My response (#21), by using the reply function, was clearly to Edward.

I am well aware of who your post was directed at but I don't think Edward was to blame for any thought that someone was scare-mongering. Edward in a new member and was simply stating possible scenarios. In my response to your post I was simply saying to blame me if you think anymore has raised an issue which is scaremongering.

Anyrate I have passed on my thoughts and will be following up with my bank.

 

[Edward]

By the by, at least one foreign bank in Indonesia has done the same thing to its foreign customers as the Australian bank did through contacting Brian.

 

[Edward]

Edward in a new member and was simply stating possible scenarios.

I feel I should state that even though I am a new member I have been an avid reader of the forum and have learned so much here.

This country has been good to me over many years. Perhaps too good.

 

[Davita]

Although the Australian banks banks are complying with the CRS requirements I can assure the UK, and others, have been doing this for about a year so nothing new...except to Australian bank clients.
At the local level it is common knowledge that Indonesians have been storing cash and other financial assets in Singaporean banks which information has, hitherto, been denied to the Indonesian Gov't. This has changed and now gives the RI Gov't every reason to investigate those assets and tax/fine accordingly. This was the real purpose behind the now defunct tax amnesty. It was a chance for those who were hiding assets to declare them, pay a minimal tax, and have amnesty.

Many didn't comply and my hope is the RI Gov't applies full pressure and taxation to those citizens who have not complied with Indonesian tax law.

 

[Davita]

I am well aware of who your post was directed at but I don't think Edward was to blame for any thought that someone was scare-mongering. Edward in a new member and was simply stating possible scenarios. In my response to your post I was simply saying to blame me if you think anymore has raised an issue which is scaremongering.

Edward can talk for himself...this forum is well moderated.....we don't need any quasi-moderation.

 

[Edward]

Purely as a matter for debate, do you feel Davita, that Indonesians who have "stored" money overseas (perhaps ill-gotten in their country in the main) are equally liable for taxes and fines as those who came here to work, having worked hard in their home country, invested wisely there, and have for many years earned income there that was not taxed here?

 

[Edward]

Edward can talk for himself...this forum is well moderated.....we don't need any quasi-moderation.

I think I better let this one go through to the 'keeper.

 

[Davita]

Purely as a matter for debate, do you feel Davita, that Indonesians who have "stored" money overseas (perhaps ill-gotten in their country in the main) are equally liable for taxes and fines as those who came here to work, having worked hard in their home country, invested wisely there, and have for many years earned income there that was not taxed here?

It isn't a matter that is for debate. All countries have tax laws and some have reciprocal laws to prevent double-taxation. It is up to the individual working outside his own country to determine those laws and how they may apply to him/her.
This has been the case for many, many years..
The CRS and USA FACTA rules has nothing to do with those already established laws. It is an attempt to prevent the money- laundering and criminal activity involving assets not declared from one jurisdiction to another as the banking secrecy laws prevented them disclosing...we will see this play-out during the current Manafort case in USA.
This has been a big problem internationally and hopefully will be exorcised.

 

[Jamu]

Most of this type of correspondence is via email or by a message sent to a dedicated inbox in an online account of the person's financial intermediary. I would think ignoring such emails would be fine for all parties concerned, if only a small amount of money were involved. For foreigners here who are non-residents for tax purposes in their home countries, and with considerable income earning assets there, this is a big concern. It is especially galling because it has an element of retrospectivity about it: these foreigners having arranged their investment portfolios thinking this reporting unlikely to ever occur. Some, perhaps most, are currently having tax withheld (as non-residents in their home countries) on their income, and have now come to realize that they will owe the Indonesian tax department an additional hefty sum as well.

So let me understand your point...which seems to be that those who 'arranged their investment portfolios' to evade legally obliged tax, on the basis that they didn't think they would be caught out by a cross border reporting regime which has been in process since 2014, are being retrospectively harmed? Galling indeed, that these foreigners would have the temerity to believe that they were entitled to evade tax while enjoying their life in Indonesia (and probably at the same time moaning about corruption here)...

 

[Edward]

So let me understand your point...which seems to be that those who 'arranged their investment portfolios' to evade legally obliged tax, on the basis that they didn't think they would be caught out by a cross border reporting regime which has been in process since 2014, are being retrospectively harmed? Galling indeed, that these foreigners would have the temerity to believe that they were entitled to evade tax while enjoying their life in Indonesia (and probably at the same time moaning about corruption here)...

I agree with you. But I am talking about 1995. It was a different world then.

Edit: I will concede that the Double Tax Agreement between Australia and Indonesia entered into force in 1992.

 

[Edward]

It isn't a matter that is for debate. All countries have tax laws and some have reciprocal laws to prevent double-taxation. It is up to the individual working outside his own country to determine those laws and how they may apply to him/her.
This has been the case for many, many years..
The CRS and USA FACTA rules has nothing to do with those already established laws. It is an attempt to prevent the money- laundering and criminal activity involving assets not declared from one jurisdiction to another as the banking secrecy laws prevented them disclosing...we will see this play-out during the current Manafort case in USA.
This has been a big problem internationally and hopefully will be exorcised.

I beg to differ. The principal aim of CRS is to better fight tax evasion and ensure tax compliance.

 

[Davita]

I beg to differ. The principal aim of CRS is to better fight tax evasion and ensure tax compliance.

Isn't that what I have said?
How better to achieve that than to open up the banking system and get rid of its secrecy laws and also so Gov't to Gov't can ensure that they aren't being used as avenues for money-laundering and tax evasion.

Your initial point in post # 20

Davita, while what you say may all be true, I think you miss the point. This is about collecting tax owed under Double tax agreements.[/QUOTE]

I asked you to substantiate your point but so far...no evidence.
CRS and FATCA has nothing to do with double tax agreements which, to my knowledge, have been around in many countries at least since 1974 when I first declared myself non-resident UK.

 

[Edward]

Isn't that what I have said?
How better to achieve that than to open up the banking system and get rid of its secrecy laws and also so Gov't to Gov't can ensure that they aren't being used as avenues for money-laundering and tax evasion.

Your initial point in post # 20

I asked you to substantiate your point but so far...no evidence.
CRS and FATCA has nothing to do with double tax agreements which, to my knowledge, have been around in many countries at least since 1974 when I first declared myself non-resident UK.

I might rephrase as follows: This [CRS] will facilitate collecting tax owed according to Double tax agreements.