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Tax Administration Act 1994

Foreign account information-sharing agreements - CRS standard

185N: Requirements for financial institution

You could also call this:

"Rules for banks and other financial institutions to report account information"

Illustration for Tax Administration Act 1994

You are a financial institution in New Zealand. You must follow the CRS applied standard rules. You have to do certain tasks for each reporting period and for each financial account you manage. You need to get information about the account holders and follow the due diligence procedures. You must give a report to the Commissioner each year. The report must include the information required by the CRS applied standard. You have to give the report by 30 June each year. There are rules about when you must give your first report. These rules depend on the type of account and when it was identified. You can choose to apply the reporting rules for residents of reportable jurisdictions to all your accounts. You must follow the rules in the CRS applied standard when working out the total balance of accounts. You cannot choose to use a different reporting period or give average balances. Your report must be in the prescribed electronic format. You can read more about the CRS applied standard and the rules you must follow as a financial institution in New Zealand, as amended by the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017. You have to comply with these rules if you are a financial institution in New Zealand. You must manage your accounts and give reports according to these rules.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM7330402.

Topics:
Money and consumer rights > TaxesMoney and consumer rights > Banking and loans
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Part 11BForeign account information-sharing agreements
CRS standard

185NRequirements for financial institution

  1. A financial institution must comply with this section for a period in which the financial institution is—

  2. resident in New Zealand under the CRS applied standard:
    1. a branch located in New Zealand under the CRS applied standard.

      1. For the purposes of subsection (1), the requirements for a financial institution that is resident in New Zealand do not include requirements for a branch of the financial institution that is not located in New Zealand.

      2. The financial institution must, for each reporting period and each financial account that is maintained by the financial institution in the reporting period,—

      3. perform the due diligence procedures, and obtain the information, required by the CRS applied standard; and
        1. for each new financial account, obtain the information referred to in subsection (4) for each account holder or controlling person identified by the financial institution as being—
          1. a resident of a foreign jurisdiction other than a reportable jurisdiction; and
            1. a person or entity who would be a reportable person if the foreign jurisdiction were a reportable jurisdiction.

            2. The information required under subsection (3)(b) to be obtained for an account holder or controlling person is—

            3. the date of birth for an individual; and
              1. the taxpayer identification number issued by the foreign jurisdiction for the person or entity, except if the domestic law of the foreign jurisdiction does not require the collection of the TIN.

                1. The financial institution must, for each reporting period, give to the Commissioner a report of the information that the CRS applied standard and subsection (11) require the financial institution to provide to the competent authority.

                2. The report by the financial institution for a reporting period must be given to the Commissioner by the 30 June following the 31 March that is the end of the reporting period, except as given by subsection (7).

                3. The first report by the financial institution for information with respect to a financial account that is maintained by a financial institution in a reporting period must be given to the Commissioner by—

                4. 30 June 2018, if the financial account is identified before that date as being a reportable account that is a pre-existing individual account and a high value account:
                  1. 30 June 2019, if the financial account is identified before that date as being a reportable account that is a pre-existing entity account or that is a pre-existing individual account and a lower value account.

                    1. For the purposes of this section, a financial account is not an undocumented account except in a situation described in Section III, subparagraph B(5) or C(5)(c) of the CRS applied standard.

                    2. In determining the aggregate balance or value of financial accounts, the financial institution must apply the rules in Section VII, subparagraph C(1) to (3) of the CRS applied standard.

                    3. The financial institution may choose that the reporting requirements given by the CRS applied standard for financial accounts held or controlled by a resident of a reportable jurisdiction apply to all financial accounts maintained by the financial institution and held or controlled by a resident of a foreign jurisdiction.

                    4. A financial institution that makes the election referred to in subsection (10) must comply with the chosen reporting requirements in each report for a reporting period.

                    5. A financial institution that chooses to review pre-existing entity accounts, whether all such accounts or a clearly identified group of such accounts, must complete the review by the date given in Section V, subparagraph D(1) of the CRS applied standard for completion of the review of pre-existing entity accounts with the specified aggregate account balance or value.

                    6. A financial institution that chooses to treat a discretionary beneficiary of a trust as not being a controlling person for the trust until the beneficiary receives a distribution must have reasonable safeguards and procedures for identifying when a distribution is made to the beneficiary.

                    7. The financial institution is not permitted to choose for a report for a reporting period—

                    8. to use a reporting period other than a period ending with 31 March:
                      1. to give the average balance of a financial account for a reporting period as being the balance for the financial account for the reporting period.

                        1. A report for a reporting period must be in the prescribed electronic format.

                        Notes
                        • Section 185N: inserted, on (applying for arrangements affecting the requirements of a person under this Part for a reporting period ending after 31 March 2017), by section 28(1) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).