Since the development and globalisation of financial markets, cross-border capital movements have been on the increase and same has rendered it rather easy for individuals and also entities to hold investments outside their own jurisdiction.
As such, after the G20 meeting in Mexico, the OECD was assigned the responsibility to develop a new global model for automatic exchange of information in order to achieve the above results.
Accordingly, in February 2014, the OECD has launched CRS which is the new and sole global standard for automatic exchange of information, and which is similar to FATCA however still differs from it in the way that it is broader in scope than FATCA, it does not apply withholding tax and relies on a multilateral agreement.
Unlike FATCA, CRS is based on tax residency and caters for multiple reporting in case of multiple residency of the individual or entity.
As far as Mauritius is concerned, we have signed the Convention on Mutual Administrative Assistance in Tax Matters (the “Convention”) developed by the OECD in June 2015. Formalities for the bringing into force of the Convention have been completed for the Convention to enter into force as from 1 December 2015.
As from 1 January 2017, all entities tax resident in Mauritius would have to comply with CRS, to the extent applicable, however the reporting deadline for the first reporting period which is 1 January 2017-31 December 2017, would be September 2018.
Under the newly signed Convention, information can be exchanged on request, spontaneously or automatically.
Hence, Mauritius will be able to exchange information automatically on a reciprocal basis with all jurisdictions which have signed the Convention.
At OCS we have altered our internal procedures and checklists in order to accommodate for the newly modified due diligence requirements for both FATCA and CRS. Further, our corporate and compliance dedicated teams have researched, studied and developed a wide knowledge of the newly implemented legislation as well as the processes which are involved.