The Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill 2015 was passed, on Mon 8.2.2016, by the House of Representatives, without amendment.
The Bill proposes to amend Sch 1 to the Taxation Administration Act 1953 to insert a new Subdiv 396-C (as part of Div 396 – Third Party Reporting, along with the FATCA provisions).
It will require certain financial institutions in Australia (known as Reporting Financial Institutions) to report information to the Commissioner about financial accounts held by foreign tax residents and:
- require financial institutions to carry out Common Reporting Standard (CRS) due diligence procedures to identify reportable accounts held by foreign tax residents and provide statements about those accounts;
- require financial institutions to provide a statement (to the Commissioner) in relation to certain accounts if they receive a notice requiring them to do so; and
- provide for administrative penalties when financial institutions fail to collect account holder self-certifications about the jurisdiction of residence for tax purposes.
In the Senate
The Bill was passed by the Senate on Wed 24.2.2016, with several Government and Opposition amendments concerning High Value Accounts, reporting on Reportable Accounts, and Pre-existing Entity Accounts. The House of Representatives agreed to the Senate amendments on 29 February 2016 and it awaits Royal Assent.
- The Government amendments seek to correct a technical anomaly in the Bill so that statements relating to Preexisting Individual Accounts that are High Value Accounts as of 30 June 2017 must be reported to the Commissioner by 31 July 2018, regardless of whether the Reporting Financial Institution conducts its due diligence procedures of these accounts between 1 July 2017 to 31 December 2017 or 1 January 2018 to 31 July 2018.
- The Labor amendments will require the Commissioner to publish an annual report providing aggregated, de-identified data on the financial holdings of foreign nationals in Australia. The de-identified data will indicate the aggregate number of accounts held by foreign nationals of each country and the aggregate dollar value of holdings in the accounts. Another Labor amendment (also supported by the Government) will bring forward from 31 July 2019 to 31 July 2018 the deadline for reviewing entity accounts to be finalised and align it with the time frame outlined in the Bill for high-value, individual accounts. The Bill now goes back to the House of Reps for consideration of the Senate’s amendments.
[APH website] [LTN 24, 8/2/16] [LTN 37, 25/2/16]