Automatic Exchange of Information
The Automatic Exchange of Financial Account Information (AEOI) became a global standard in 2013 and is derived from Article 26 of the OECD Model Tax Convention. Under this regime financial institutions are required to provide information related to reportable financial accounts held by non resident individuals, from participating jurisdictions. (These jurisdictions would be specified by the Competent Authority [CA]). AEOI emerged out of the need for sovereigns to protect much needed government revenue. This need has become more critical as globalization has made it easier for taxpayers to hold and manage their assets outside of their country of residence. A global approach to combat tax evasion and avoidance is therefore required to ensure that persons do not shift assets to avoid the correct reporting of income.
The Common Reporting Standard (CRS) and its associated commentaries provide the reporting and due diligence standards which will be used by jurisdictions to gather and transmit financial account information. In an attempt to reduce costs and maximize efficiency, the CRS was developed in a manner very similar to the Intergovernmental approach used for the Foreign Account Tax Compliance Act (FATCA). This standardized reporting approach was also adopted to simplify the exchange process. One could well imagine trying to exchange information with different countries using different platforms and schemata. The process would undoubtedly prove tedious.
Saint Lucia signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAC) in November 2016 and is scheduled to submit the first AEOI reports in September 2018.
The Following Information To Be Reported Annually:
- Account balance or value
- Sales proceeds from financial assets
- Other income generated from assets held on account
- Income from certain insurance products
- Automatic Exchange of Financial Account Information Act No. 22 of 2016
- Automatic Exchange of Financial Account Information (Amendment) Act No. 10 of 2017
- Amendment Schedule 2 S.I. #105 of 2017
- Designation of Non-Reporting Financial Institutions S.I. # 107 of 2017
- Designation of Excluded Accounts S.I. # 119 of 2017