Financial institutions need to pay special attention when implementing automatic exchange of information process for nonresidents
The National Tax Agency on June 7, 2024, published an updated version of the common reporting standard (CRS) “frequently asked questions” (FAQs) that lists the points that financial institutions need to pay special attention to when implementing the automatic exchange of information process for nonresidents.
The FAQs have been updated to include the following question:
Q.5. Does information managed by a department, other than the one responsible for the automatic exchange of financial account information related to nonresidents (such as post-secondment address details managed by the Human Resource Department for employees transferred overseas), qualify as new information?
A. Information managed by departments other than the responsible department is considered new information.
New information means any addition of information to the records maintained by reporting financial institutions that causes reporting financial institutions to know, or have reason to know, that certain items in notification forms (self-certifications), such as jurisdiction of residence, are not true and accurate or indicates change in circumstances have occurred.
Reporting financial institutions include all departments, not just specific departments such as the department in charge. Therefore, if information meets the requirements for new information, it must be treated as such, regardless of the department which manages it.
Read a June 2024 report prepared by the KPMG member firm in Japan