WHAT NEEDS TO BE REPORTED?
The requirement is that the financial account information is to be exchanged, all financial institutions are required to report different types of accounts in tax matters which is covered with an agreed due diligence procedure to be followed by the financial institutions.
The reporting regime requires a broad scope which covers three main areas:
• Financial Information reported: A comprehensive reporting regime covers different types of investment income including interest, dividends and similar types of income, and information on account balances.
• Account holders subject to reporting: A comprehensive reporting regime requires reporting not only respect to individuals, but covers legal entities or other formal arrangements. This includes shell companies, trust or similar arrangements, including taxable entities to cover situations that there is a hidden principal amount but is willing to pay tax on the income.
• Financial institutions required to report: A comprehensive reporting regime covers not only banks but also other financial institutions such as brokers, certain collective investment vehicles and certain insurance companies.