Pursuant to the commitment of The Bahamas to effectively implement the Common Reporting Standard (“CRS”)/Automatic Exchange of Information, The Competent Authority wishes to advise all financial institutions (FIs) as follows:
1. The Government of the Bahamas has taken a policy decision to implement CRS by way of the Multilateral Convention on the Mutual Administrative Assistance in Tax Matters (“Multilateral Convention”) on a non-reciprocal basis.
2. The Bahamas will implement CRS using the “wider approach” which means that FIs will need to collect and retain the CRS information for all account holders. This approach requires FIs to collect and retain the information, ready to report, in relation to all non-residents. The CRS information will not be transmitted to The Competent Authority until FIs are notified to do so by the Competent Authority.
FIs will therefore carry out due diligence procedures in relation to financial accounts even if the account holder (and any controlling person of the account holder) is a tax resident of an overseas jurisdiction that is not a reportable jurisdiction. However, FIs are only required to submit the mandatory information regarding reportable accounts to The Competent Authority when requested to do so.
KEY DATES UNDER THE COMMON REPORTING STANDARD
The following are key effective dates for the implementation of the CRS in The Commonwealth of The Bahamas:
- Pre-existing Accounts are those in existence as at 30 June, 2017.
- New Accounts requiring a self-certification by the customer are those opened on or after
1 July, 2017. For New Accounts a self-certification containing both the TIN(s) (where issued by the jurisdiction(s) in question), and date of birth (in the case of an individual) are required to be obtained.
- The review of Pre-existing Lower Value Individual, and Entity Accounts must be completed by 31 July 2019. These accounts would be reported and exchanged in 2019.
- The review of Pre-existing High-Value Individual Accounts must be completed by 31 December 2017.
- Financial Institutions must complete their initial registration by 30 June 2018 or, if an entity becomes a Financial Institution after 30 April 2018, registration must be completed by with the Competent authority at the next available registration date after the entity became a Financial Institution.
- Financial Institutions must complete their reporting to the Competent Authority by 31 July 2018 for the reporting period from 1 July 2017 to 31 December 2017.
- Financial Institutions must complete their reporting to the Competent Authority by 31 July 2019 for the reporting period January 2018 to 31 December 2018 and by 31 July of each year thereafter for the reporting period of January to December.
- First exchanges of information by the Competent Authority to partner jurisdictions will occur on 30 September 2018 and at 30 September of each year thereafter.
- A Financial Institution is not required to perform review procedures on any accounts that were closed before July 1, 2017.
In the case of an account closure, the Reporting Financial Institution must only report that the account was closed (i.e. not the balance).
Please consider this as preliminary guidance to enable you to commence your due diligence reviews. The draft Guidance Notes are under review and will provide more detailed information with respect to the process for effectively implementing The Common Reporting Standard. These Guidance Notes will be published in due course.