Sladen Snippet - Individuals’ financial affairs at risk of being reported to foreign jurisdictions by the ATO

Australia is obligated under Automatic Exchange of Information (AEOI) regimes to automatically exchange financial account information with foreign jurisdictions. Such regimes include the Foreign Account Tax Compliance Act (FATCA) in respect of exchange of information with the United States and more recently the common reporting standard (CRS) rules in respect of exchange of information with over 100 jurisdictions which have signed onto the CRS.

This means that if you are a ‘reportable person’ your first CRS report must be lodged by 31 July 2018 to cover the period from 1 July 2017 to 31 December 2017. Australian Taxation Office (ATO) information on CRS lodgement is available here.  

CRS reports must be lodged not only by multinational enterprises, but also by financial institutions (such as banks, investments entities and specific insurance companies) in relation to persons who are considered to be ‘reportable’ under the ATO AEOI Guide.

In order to establish whether an entity or individual is ‘reportable’ for the purpose of CRS reporting, financial institutions may request a ‘self-certification’ from individuals in their personal capacity or in their capacity of controlling person of a corporate account. Some of the factors that financial institutions may consider when requesting this ‘self-certification’ include:

  • the account holder’s nationality or residence status;
  • the account holder’s residential address and mailing address currently on file with the financial institution;
  • the account holder’s telephone numbers currently on file;
  • whether there are standing instructions to transfer funds in the account to another account in a foreign jurisdiction;
  • whether there is a current 'in-care-of' address or 'hold mail' address for the account holder; and
  • whether there is any power of attorney or signatory authority for the account.

It is recommended that you seek legal assistance if you receive a request for ‘self-certification’ from a financial institution, in order to understand the legal consequences of your response and the possibility of being reported to the ATO and subsequently to a foreign jurisdiction.

To discuss this article, or for any further information please contact:

Daniel Smedley
Principal | Accredited Specialist in Tax Law
Sladen Legal
M +61 411 319 327 |  T +61 3 9611 0105
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia

Patricia Martins
Sladen Legal
T +61 3 9611 0138
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia

Neil Brydges
Special Counsel | Accredited specialist in Tax Law
Sladen Legal
M +61 407 821 157 | T +61 3 9611 0176
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia