The General Directorate of Taxation has issued a resolution establishing the objective selection and risk criteria that will be used to supervise compliance with the Common Reporting Standard (CRS), the global system created by the OECD for the automatic exchange of financial information among countries in order to prevent tax evasion.
The resolution does not create new reporting obligations.
Instead, it defines the parameters that the tax administration will use to select entities that will be subject to supervision, verification, and monitoring of CRS compliance.
In other words, there is now greater clarity regarding the factors that may increase the likelihood of a review.
Which entities could be selected for supervision?
The tax administration may prioritize, among others, entities that:
- Report a high volume of accounts or jurisdictions.
- Fail to submit the CRS report or the Nil Report.
- Have inconsistencies identified by other jurisdictions.
- Record an increase in undocumented accounts.
- Significantly reduce the number of reported accounts compared to the previous period.
- Have recurring errors in information such as the TIN or date of birth.
- Have failed to comply with reporting obligations or have been previously sanctioned.
What factors increase the risk of supervision?
The tax administration will assess factors such as:
- Late submission of the report.
- Incorrect or incomplete information.
- Deficiencies in due diligence processes.
- Failure to obtain self-certifications.
- Failure to retain supporting documentation.
