Bahamas: CRS guidance regarding undocumented accounts

The Bahamas Competent Authority on July 11, 2025, issued guidance outlining the classification, due diligence obligations, and reporting requirements for undocumented accounts under the common reporting standard (CRS). Effective immediately, reporting financial institutions are required to report undocumented accounts.

An undocumented account generally arises when a reporting financial institution is unable to obtain sufficient information form a pre-existing individual account holder to determine the account holder’s tax residency. Only a pre-existing individual account may be classified as undocumented account; entity accounts and new individual accounts cannot be classified as undocumented accounts.

If the only indicia associated with a pre-existing individual account is a “hold mail” or “in-care-of” address in a reportable jurisdiction, and no other indicia are found, reporting financial institutions must apply the special due diligence procedures outlined below. If these procedures do not determine the account holder’s tax residency, the reporting financial institution should classify such accounts as undocumented and report it to the Competent Authority.

Special due diligence procedures:

• Pre-existing individual lower value accounts: Reporting financial institutions must conduct an electronic record search. Following the search, if only a “hold mail” or “in-care-of” address in a reportable jurisdiction is identified, and no other indicia are found, reporting financial institutions must:
  • Conduct a paper record search, or
  • Seek to obtain a valid-self certification or documentary evidence to determine the account holder’s tax residency.

These procedures do not need to be repeated in subsequent years, unless there is a change in circumstances or the account becomes High Value.

• Pre-existing individual high value accounts: Reporting financial institutions must conduct an enhanced review, including an electronic record search, paper record search, and a relationship manager enquiry. Following the review, if only a “hold mail” or “in-care-of” address in a reportable jurisdiction is identified, and no other indicia are found, the reporting financial institution must seek to obtain a valid self-certification or documentary evidence. These procedures must be reapplied annually until the account ceases to be undocumented.

Read a July 2025 report prepared by the KPMG member firm in the Bahamas