We have invited Mrs. Johanne Hague, Partner at Juristconsult Chambers to share with us her general views on the Common Reporting Standard.
The Common Reporting Standard (“CRS”) is already live in some countries and the countdown has begun towards the first exchange of information between Mauritius and other countries around the world.
It is undeniable that the CRS will have an impact on the financial services industry and that it is quite challenging to navigate through CRS’ complex and ever-changing maze of rules. However, it is also important to keep in mind that CRS is not only to fight cross border tax evasion, but it is a way to strengthen tax collection globally.
The CRS information exchange is not only a positive step towards global tax transparency, but also a way to reduce costs to governments and business by the creation of a single Automatic Exchange of Information (AEOI) for financial account information. In addition, through CRS, the exchange of information on request and in effective manner will become the usual way of doing business.
For Mauritius, I can say that what seemed unrealistic and far-fetched five years ago in the world of international taxation is now very much a reality. Banks, insurance companies, investment advisers, investment funds and various other players in the financial services industry have been gearing up for the first reporting to the Mauritius Revenue Authority (“MRA”) scheduled for end of July 2018. The MRA will in turn be exchanging with other tax authorities in September 2018. In a way, the hardest part appears to be over. Financial institutions have had to revamp their contractual and onboarding documentation, update their systems and processes and train their personnel and the industry as a whole feels more or less prepared for the fast approaching deadline.
Tax legislation and the CRS is no exception, is never static and constantly has to evolve and adapt to changes in the global eco-system. As part of its crusade against tax avoidance, the OECD (“Organisation for Economic Co-operation and Development”) has already issued mandatory disclosure rules which purport to identify any avoidance schemes which have been devised to avoid reporting under CRS. It is simply a matter of time before those rules are implemented in our domestic legislation. This, will undoubtedly have an impact on Mauritius.
In saying that, it is also important not to lose track of the bigger picture and the stamp that the CRS adds to Mauritius as a robust and transparent jurisdiction.
Mrs. Johanne Hague