Oman: Central Bank Issues Circular to Implement Common Reporting Standard (CRS) Regime
In an effort to align with international best practices and combat cross-border tax evasion, Oman’s Central Bank (CBO) has issued a circular implementing the Common Reporting Standard (CRS) regime. The circular sets rules for the automatic exchange of information (AEOI) through CRS.
Background
The CRS was established in response to the Foreign Account Tax Compliance Act (FATCA) regulations, which require non-US Financial Institutions to provide the IRS with information about their US customers. The CRS has a broader scope, requiring Financial Institutions to report information on accounts held by tax residents of participating jurisdictions and certain entities controlled by such taxpayers.
Circular Requirements
The circular requires Financial Institutions in Oman to:
- Identify and report accounts opened and held by persons who are tax residents in a CRS-participating jurisdiction, including the Sultanate of Oman
- Report this information to the Omani tax authorities, which will then exchange it with other reporting jurisdictions that have signed the Multilateral Agreement
Definition of Financial Institutions
The circular defines four types of Financial Institutions under the CRS definition:
- Custodial institutions
- Depository institutions
- Investment entities
- Specified insurance companies
It also outlines the criteria for determining tax residency, including:
- Domicile
- Place of effective management or incorporation/organization
Compliance Requirements
To comply with the CRS regulations, Financial Institutions in Oman will need to:
- Collect self- certifications from new accounts
- Conduct due diligence reviews on pre-existing accounts
- Document their internal governance and compliance framework
- Report reportable accounts
Timeline
The CBO has declared that the collection of CRS-related information for new account holders will start from July 1, 2019. Existing account holders are expected to provide necessary information on tax residency later this year.
Oman is preparing primary and secondary legislation to implement the CRS and plans to commence its first AEOI in September 2020.
Conclusion
The implementation of the CRS regime is a significant development for Financial Institutions operating in Oman, requiring them to adapt their processes and systems to comply with the new regulations.