We seen a lot of hue and cry about Indian assets stashed abroad and how the government plans to bring it back. It is pertinent to note that opposition while trying to corner Narendra Modi government has again been caught napping by ignoring the international treaties that were in fact negotiated during the UPA regime. The sharing of CRS data internationally would surely leave the opposition red faced as they have failed to highlight the international efforts done by them. Modi government is sure to highlight this as another major achievement in the 2019 polls.
CRS: Common Reporting Standard: The Game Changer
The Common Reporting Standard (CRS) was developed in response to the request of the G20 to fight against tax evasion and call on jurisdictions and their financial institutions to automatically exchange information among them on an annual basis. CRS was finally approved by the Organization for Economic Co-operation and Development (OECD) Council on 15 July 2014 and came into force on January 1, 2017 among most of those jurisdictions which decided to implement it.
CRS sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions. In addition to translating the CRS into domestic law, a key element of its successful implementation is the putting in place of an international framework that allows the automatic exchange of CRS information between jurisdictions.
Over 100 jurisdictions currently participate in the Convention, including 15 jurisdictions covered by territorial extension. This represents a wide range of countries including all G20 countries, the major emerging national economies: Brazil, Russia, India, Indonesia, China and South Africa (BRIICS), all OECD countries, major financial centers and an increasing number of developing countries. Exchange relationships between jurisdictions can be based on different agreements such as: the multilateral Convention on Mutual Administrative Assistance in Tax Matters (the “Multilateral Convention”), the CRS Multilateral Competent Authority Agreement (the “CRS MCAA”), the EU Directive (if applicable), agreements between the EU and third countries and bilateral agreements.
The CRS would also impact the undeclared assets and bank accounts held by NRI’s in India and abroad. Many of them can expect a call from the tax authorities in 2018 as a result of the data sent by the Indian banks to the tax authorities in their countries of residence.
The article is written by Mohit Suri. Mr Suri is Managing Partner of the International law firm MLegal and heads its global practice. Rated by his peers as among the best lawyers in Asia, he is President of the Indian Immigration Lawyers Association and a standing counsel for the Union Government in the Supreme Court of India. He is a member of Supreme Court Bar Association, the Delhi High Court Bar Association and the Delhi Bar Association.
In the international arena, he is President of International Mobility Lawyers Association and of the Intellectual Property Jurists Association. Mohit Suri specializes in advising international organizations and governments in the fields of mergers and acquisitions, corporate compliance, intellectual property, government contracting, as well as anti-money laundering and FEMA, tax and international mobility issues relating to the movement between countries of individuals for work and resettlement.
MLegal’s clients include Deloitte, Reckitt Benckiser, Astron, BOC (part of the Linde Group), Diageo, Exxon Mobil, Xerox, and FitnessFirst. Mohit Suri graduated B.Com (Hons) from Shaheed Bhagat Singh College, Delhi University, in 1995, and LLB from Delhi University Law College. He is also aMicrosoft Certified System Engineer and a Sun Certified Java Professional.
Outside his legal career, Mohit Suri is a Senior Joint Vice-President and Chairman of Legal and IT at the Roshanara Club, founded in 1922 and considered the birthplace of the Board of Control for Cricket in India (BCCI). A committed sports enthusiast, he has won medals in state, national and international championships for power lifting. In September 2017, he will be representing India in the Commonwealth Power Lifting and Bench Press Championships, to be held in South Africa.
[Opinions expressed by the author are exclusively his personal. The Policy Times bears no responsibility and authenticity of the data and opinions expressed.]