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COMMON REPORTING STANDARDS

Automatic Data Exchange

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The Common Reporting Standards (CRS), also known as the "Common Reporting Standard" or "Automatic Exchange of Financial Account Information," are international agreements for the automatic exchange of financial data between different countries.

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Attack on the Banking Secrecy

The Common Reporting Standards (CRS), also known as the "Common Reporting Standard" or "Automatic Exchange of Financial Account Information," are international agreements for the automatic exchange of financial data between different countries. These standards were developed to combat tax evasion and money laundering by facilitating the automatic exchange of financial information between tax authorities. CRS is based on the model of automatic information exchange, where financial institutions in one country provide information about foreign customers to their own tax authorities, who then forward it to the tax authorities of the customer's country of residence.
 

It's important to emphasize that CRS regulations are implemented internationally and are based on bilateral agreements between participating countries. Most countries worldwide have adopted these standards.

CRS is residence-based, not citizenship-based. This means that information about taxpayers is exchanged based on their tax residence, regardless of their citizenship. CRS aims to collect and exchange information about the financial accounts of individuals who are tax residents in a specific country, regardless of their citizenship.

If someone intends to optimize their tax situation and possibly move to a country like Dubai, it should be done carefully and in compliance with applicable laws and regulations. It is advisable to seek professional legal and tax advice in such matters to ensure that all activities are in line with the relevant laws.

Questions and Answers about Automatic Data Exchange:

**What is CRS?**
CRS stands for "Common Reporting Standards," and it is an international agreement for the automatic exchange of financial information between countries to combat tax evasion and money laundering.

**How does CRS work?**
CRS works through the automatic exchange of information between financial institutions in a country and the tax authorities of that country. The tax authorities then transmit information about the financial accounts of taxpayers residing abroad to the tax authorities of the taxpayers' home countries.

**Who is affected by CRS?**
CRS affects individuals who are tax residents in a country and hold financial accounts abroad. It also affects financial institutions managing these accounts. It also applies to the ultimate beneficial owners of companies holding bank accounts abroad.

**What information is exchanged under CRS?**
Under CRS, information exchanged includes account holders' information, account balances, interest income, dividends, and the sale of financial assets.

**Would it be possible to legally circumvent CRS?**
Tax avoidance is legal as long as it is in compliance with applicable laws and regulations. Evading CRS through illegal means to maintain bank secrecy can lead to severe legal consequences.

**Can I change my tax residence to circumvent CRS?**
Changing your tax residence alone is not sufficient to circumvent CRS. You must comply with the applicable laws and regulations in your new country of residence.

**Is CRS applicable worldwide?**
CRS is an international agreement adopted by many countries worldwide. Most countries have joined the automatic information exchange under CRS.

**What are the penalties for non-compliance with CRS?**
Penalties for non-compliance with CRS apply to financial institutions, not natural persons.

**How can I ensure I am CRS-compliant?**
To be CRS-compliant or legally optimize your tax situation, it is recommended to seek professional tax advice. We are happy to advise you on CRS-related matters.

**Are there legal ways to optimize taxes without circumventing CRS?**
Yes, there are legal ways to optimize taxes by taking advantage of tax benefits and incentives offered in different countries. However, these measures should be transparent and in compliance with the laws. The circumvention of CRS primarily serves to maintain bank secrecy, often for specific reasons such as protection against political upheaval, expropriation, or war.

Case Examples:

**Case 1:**
Mr. Meier, a German citizen residing in Germany, maintains a bank account in Switzerland. According to the Common Reporting Standards (CRS), the Swiss bank must automatically report all transactions from Mr. Meier's bank account to the German tax authorities. Therefore, the Swiss banking secrecy no longer applies to Mr. Meier.

**Case 2:**
Mr. Meier, a German citizen residing in Dubai, maintains a bank account in Dubai. According to CRS, the Dubai bank is not required to exchange data with the German tax authorities since the law is residence-based.

**Case 3:**
Mr. Friedrich, an Austrian citizen residing in Dubai, maintains a bank account in Switzerland. According to CRS, the Swiss bank must exchange data with the tax authorities of the United Arab Emirates, as the law is residence-based. However, this is waived since the United Arab Emirates does not impose income or wealth taxes.

Tax residence is the place where an individual is considered a resident according to a country's tax laws. This can vary from country to country and depends on various factors such as the duration of stay and economic ties. Individuals who are tax residents in a country are subject to the relevant tax laws and regulations.

  • Banking secrecy for asset protection ​in the United Arab Emirates 

  • 0% income tax

  • 0% corporate tax

  • 0% capital gains tax

  • No automatic data exchange of bank details (banking secrecy) for holders with a UAE residence permit. 

  • 100% capital deposit guarantee with local banks

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How do I get permanent residence?

In addition to an employment relationship, there are essentially 2 options 

Business Setup

Requirements 

  • Local company owner with at least 25% stake in the company (eligible for an investor visa for a period of 3 years).
     

  • Immediate family members also receive a residence permit (spouse, children).
     

  • To maintain the status of a UAE resident, it is not necessary to reside permanently in the UAE. Entry every 6 months is the minimum requirement. 

Golden Visa 

Requirements 

  • A capital contribution or purchase of a property of at least AED 2 million (EUR, CHF 530,000)
     

  • The investment must remain in place for at least two years after issuing the visa.
     

  • Immediate family members also receive a residence permit (spouse, children).
     

  • The Golden Visa remains valid even if you do not enter the country every 6 months. 

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