Exchange of tax information

FATCA regulation

FATCA (Foreign Account Tax Compliance Act) is a US regulation aiming to fight tax evasion by US citizens and US residents who hold financial assets outside of the United States. The Internal Revenue Service (IRS U.S. tax authorities) has set up a framework to collect on a yearly basis from non-U.S. financial institutions information relating to foreign income and assets held by U.S. taxpayers outside the United States.

This regulation requires financial institutions to put in place procedures to identify their U.S. clients. Otherwise, they will be subject to a 30% withholding tax for all financial flows from a US source or from the US that they receive on their behalf or on behalf of their customers.

In order to facilitate the implementation of FATCA a large number of countries, including France, have negotiated intergovernmental agreements (IGAs) with the USA. Those countries will need to transpose into their national law the tax reporting requirements of FATCA.

Position of Crédit Agricole CIB

Crédit Agricole CIB and all financial institutions within Crédit Agricole CIB impacted by FATCA are working diligently to comply with this regulation. Crédit Agricole CIB is registered on the IRS portal as a Participating Foreign Financial Institution (“PFFI”) as defined by the FATCA regulation.

Communication on Automatic Exchange of Information (AEOI)

Within the framework of the fight against tax evasion, the OECD developed in July 20 14 a new standard of automatic exchange of information (AEOI) between states, the Common Reporting Standard (“CRS”). About sixty country of which France have already committed to exchange their information from 2017 following this new standard, and around thirty others from 2018. In parallel, The European Union Council adopted in 9.12.2014 a new Directive  2014/107/EU amending the Directive 2011/16/EU regarding mandatory automatic exchange of information in the field of taxation. The revised Directive, which incorporated the CRS, extended the cooperation between EU Member States to automatic exchange of financial account information.   

The standard obliges the financial institutions (banks, depositories, life insurance companies) implanted in signatory countries of the standard to identify tax resident account holders of country with whom an agreement of exchange of information was concluded, and to transmit annually information (data concerning the account holder, accounts balances, income, profit from securities) to their tax authorities. This tax authority will then broadcast the data in the various concerned administrations.

The effective implementation of the AEOI is conditioned by the signature of bilateral / multilateral agreements between states, not yet effective, and by the transposition in the local laws.

Crédit Agricole CIB and all financial institutions within Crédit Agricole CIB implemented in countries committed in the AEOI (about thirty countries) are working diligently to comply with this regulation when  in force. As such, the first CA- CIB concerned entities will have to obtain the tax domicile(s) of the account holders as from January 1st, 2016 subject to local implementation.