What is CRS and who is concerned?

What is the CRS?

At the request of the G20, the Organisation for Economic Cooperation and Development (OECD) has established a common standard for the exchange of information in order to combat tax evasion and promote fiscal transparency.

This international standard for the automatic exchange of information (Common Reporting Standard, or CRS) asks signatory states which include Belgium to require their financial institutions (banks, insurance companies, investment funds, brokers, etc.) to do the following:

• gather information relating to the account holders and financial beneficiaries of certain entities who are resident for tax purposes in a country other than that in which the financial institution is established, ;and
• communicate this information to their local tax authorities. These authorities send this information to the tax authorities of the country in which the taxpayers are resident for tax purposes, which may then tax the income in accordance with the national tax legislation of the beneficiary's country of tax residence.

At the end of 2014, the European Union adopted a directive amending the Directive on Administrative Cooperation (DAC), in order to provide the CRS with a legal frame in European Union law. Implementing the CRS as part of the DAC requires that any information to be exchanged under the European directive on the taxation of savings income must be exchanged under the DAC. On 10 November 2015, the European Council repealed the directive on the taxation of savings income in order to create a harmonised structure for the automatic exchange of financial information to take place. This will avoid any additional legal or administrative uncertainties for companies and tax authorities when new rules on transparency are applied.

Belgium adopted the CRS by the law of 16 December 2015 which obliges Belgian financial institutions to report from 2017 certain financial information to the FPS Finance which will be transmitted by Belgium to the participating CRS jurisdictions.

Who is concerned by the CRS?

All Keytrade Bank clients (natural persons or entities) who are resident for tax purposes in another CRS-country than Belgium are concerned by the exchange of information. The exchange also concerns legal entities if they have beneficial owners who are resident for tax purposes in another CRS-country than Belgium.

Which items of information will be transmitted by Keytrade Bank to the FPS Finance and will be exchanged automatically?

For each reportable account, Keytrade Bank must provide the following data to the FPS Finance: In the case of an individual who is an account holder:

• the name, address, jurisdiction(s) of residence, tax identification number(s) (TIN(s)), date and place of birth of each reportable person.

In the case of a legal entity that is an account holder and a reportable person:

• the name, address, jurisdiction(s) of residence and tax identification number(s) (TIN(s)) of that legal entity.

In the case of a legal entity who is an account holder and for whom it appears that one or more persons who are beneficial owners of the account are reportable persons:

• the name, address, jurisdiction(s) of residence and tax identification number(s) (TIN(s) of that legal entity, as well as
• the name, address, jurisdiction(s) of residence, tax identification number(s) (TIN(s)), date and place of birth of each reportable beneficial owner.

Other information (concerning individuals and legal entities) to be communicated relate to:

• account numbers,
• the balances or values of the accounts at 31 December,
• total gross income (eg interest and dividends received) paid or credited during the calendar year,
• the total gross proceeds from sales, redemptions and reimbursements of securities, in particular, paid or credited during the calendar year.

If the account has been closed during the course of the year to which the data exchange relates, Keytrade Bank must communicate the identification data of the client, the total gross income and proceeds. With regard to the assets, Keytrade Bank must report ?0.00? as the account balance and must specify that the reporting is related to a closed account.

How does this work?

A client's financial institution passes on information concerning them to its local tax authority, which then gives the information to the tax authority of the country in which the client is resident for tax purposes. This exchange of information takes place annually.

What is the Tax Identification Number (TIN)?

A Tax Identification Number (TIN) is an identifying number used for tax purposes. A TIN may be assigned by your tax administration.

Attention: not all countries issue a tax identification number.

For further information per country on this number, please see the following links: http://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-identification-numbers https://ec.europa.eu/taxation_customs/tin/tinByCountry.html?locale=en

Alternatively, contact the tax authorities of the country in which you are a tax resident. If you have not yet provided us with this number (when opening an account, for example), you will receive a request at some point during 2016-2017.

When will Belgium begin exchanging information?

Almost 50 countries, including the member states of the European Union, will collect financial information relating to the 2016 calendar year, exchanging this information from 2017. In 2018, other countries will begin to exchange information relating to the year 2017.

The royal decree of 14 June 2017, fixes the list of jurisdictions, other than the member states of the European Union, with which Belgium will exchange for the first time in 2017 and 2018: http://www.ejustice.just.fgov.be/cgi/article_body.pl?language=fr&pub_date=2017-06-19&numac=2017012698&caller=summary.

Which jurisdictions are participating in the automatic exchange of information as part of the Common Reporting Standard?

Some 100 jurisdictions have given their agreement on the principle of the CRS. For information to be exchanged, the country in which the client holds the account(s) and their country of residence must both be member states of the European Union or signatories to any multilateral or bilateral agreement that provides the basis for the automatic data exchange. The list of participating countries is available on the OECD website: http://www.oecd.org/Tax/Transparency/AEOI-Commitments.pdf

What does this mean for you?

CRS obliges Keytrade Bank to check whether its clients - account holders and beneficial owners of certain legal entities are a taxable person in another CRS country. Keytrade Bank can base itself on the information and documents provided to the bank by the client at the start or in the course of the banking relationship.

In addition, Keytrade Bank should contact her clients if:

• there are indicia that they have their tax domicile in another CRS country (tax resident of another CRS country, current correspondence or residential address in another CRS country, phone number(s) of another CRS country, proxy to a person with an address in another CRS country),
• they are legal entities who need to clarify their CRS status and / or identify their economic beneficiaries.

Clients-individuals will be asked to complete a self-certification form. We ask companies to update the company's data and their beneficial owners. This way we can check if you are taxable in another CRS country.

If you do not respond to our self-certification request, we will treat you as a tax resident of any CRS country for which an indication is found.

I am not a non-resident but still received a mail with a request for self-certification. Why?

There are several reasons possible. We are mentioning 3 of them:

• Is your client file up-to-date? Did you inform Keytrade Bank about a home move and change of your tax situation? Please complete the form to update your details.
• You are holder of several banking relationships. You are in particular holder/member of a joint account, an investment club or joint ownership. Keytrade Bank does not have an e-mailaddress of all holders/members. You received a request for self-certification because at least one of the holders/members is possible a non-resident. Please forward the e-mail to the holder/member concerned with the request to provide Keytrade Bank the self-certification.
• You gave a power of attorney to a person with an address in another country then Belgium. CRS requires banks to control if the holder of an account with power of attorney to a non-resident is the beneficial owner of the assets on the account. The account holder must complete the self-certification to confirm that he is the beneficial owner of the account and not the person with the power of attorney.