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Regulatory Compliance for Reporting Financial Information (RFI) in Bermuda

The Common Reporting Standard (CRS) is an international standard for the automatic exchange of financial account information. As part of this standard, countries like Bermuda are required to report certain financial information to tax authorities. In this article, we’ll discuss the procedures and requirements for ensuring regulatory compliance with CRS standards in Bermuda.

Key Requirements for Regulatory Compliance

To ensure that a Bermuda RFI meets the necessary standards, the following key requirements must be met:

Account Holder Identification

  • The RFI’s process for identifying whether a pre-existing entity account holder is a reportable person.

Passive NFE Determination

  • Obtaining self-certifications from Pre-existing Entity Account Holders to determine if they are Passive Non-Financial Entities (NFEs).

Self-Certifications for Controlling Persons

  • Requiring self-certifications from controlling persons of passive NFEs with aggregated balances exceeding USD $1M.

Reliance on Publicly Available Information

  • Recording details of any determinations made based on publicly available information.

Additional Requirements

In addition to these key requirements, the independent reviewer must also ensure that the Bermuda RFI:

  • Records and maintains accurate documentation related to these processes.
  • Performed the necessary checks and verified the results for each account type.
  • Has in place systems, procedures, processes, and/or account holder documentation to facilitate compliance with CRS standards.

Sampling Sizes for Compliance Review

The review also includes recommendations on statistical sampling sizes for:

  • Pre-existing Entity accounts (20 or 25% of total accounts)
  • Passive NFEs with aggregated balances over USD $1M (5 or 25% of such accounts)

By following these guidelines and ensuring full compliance with CRS standards, tax authorities can facilitate international cooperation in tax administration.

Conclusion

The requirements for regulatory compliance with the Common Reporting Standard are critical to ensuring that countries like Bermuda meet their obligations under this international standard. By understanding these key requirements and implementing them effectively, financial institutions can ensure accurate reporting and facilitate international cooperation in tax administration.