On January 01, 2017, China Mainland and Hong Kong will adopt Common Reporting Standards (CRS) –– a new method used by governments around the world to create transparency on cross-border information. CRS was introduced by the Organization for Economic Co-Operation and Development in 2014 as part of the standard for Automatic Exchange of Financial Account Information.
Once China implements CRS, Chinese banks will be required to collect additional information from current and new customers, including foreign bank accounts and the following assets:
- Depository Accounts
- Custodial Accounts
- Special insurance contracts,
- Annuity contracts,
- Interest in shares of financial institutions
China’s CRS adoption is a clear sign of the country’s consent to participate in combating international tax evasion and global tax compliance.
To date, more than 100 jurisdictions have adopted or committed to implement CRS; however, the United States is the only major economy to refuse it in favor of its own standard, the Foreign Accounts Tax Compliance Act.