Monaco’s Automatic Exchange of Information (AEoI) Processes Receive Positive Review
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Six years after implementing Automatic Exchange of Information (AEoI), Monaco’s processes related to this regulation have been well-mastered by authorities and financial institutions. A recent peer review has confirmed that not only is the legal framework in place, but also the effectiveness of practical implementation on track.
Monegasque Financial Institutions Play a Crucial Role
Monegasque financial institutions have played a crucial role in this achievement. Many exchange partners who received files from Monaco achieved success rates equivalent or higher than their usual rates when matching the information with taxpayer databases. This shows the effectiveness of efforts undertaken by Monegasque financial institutions to ensure accuracy and compliance in reporting obligations.
Ongoing Vigilance Required
Despite these positive results, vigilance must remain constant to maintain optimal compliance levels. To enhance effective implementation, the Government plans on-site visits and is considering penalties and sanctions.
Common Reporting Standard Update
An update to the Common Reporting Standard was published by the OECD in June. When transposed to Monaco, it will impact due diligence and reporting procedures of Monegasque financial institutions. It is essential for companies to anticipate these modifications by assessing their impacts on existing processes and ensuring compliance.
FATCA Regime
Regarding FATCA, Monaco remains one of the few states that has not signed an intergovernmental agreement with the United States. This results in a direct interaction between Monegasque financial institutions and the US Internal Revenue Service (IRS), requiring legal advice for interpretation and implementation. This can lead to additional costs for Monegasque entities.
Key Deadlines
- The obligation to renew the compliance certification every three years
- Periodic review conducted by an internal or external auditor
- Entities registered in 2014 must perform their next periodic certification by July 1, 2024
QI Regime Update
An update was introduced in 2017, including requirements for internal compliance programs and periodic external audits. A new version of the QI agreement came into effect this year, obliging Monegasque financial institutions to revise their compliance programs and periodic review processes once again.
Conclusion
International tax regulations continue to evolve, significantly impacting Monegasque financial institutions. While Monaco maintains a strong stance on automatic exchange of information, it is crucial for financial institutions to remain vigilant to stay compliant and anticipate forthcoming changes. By staying abreast of these developments and taking proactive steps, Monegasque financial institutions can control costs, maintain their compliance level, and position themselves as actors adhering to international tax standards.
Additional Resources
- OECD Common Reporting Standard Update
- FATCA Regime Key Deadlines