Automatic Exchange of Information (AEOI), Common Reporting Standard (CRS), European FATCA… These are just a few common names for the new directive on the automatic exchange of financial information, which has been in effect since 1 January 2016.
The Belgian law regarding AEOI has been approved by Parliament on 10 December 2015.
Goal and legal framework
The Belgian law regarding AEOI has been approved by Parliament on 10 December 2015.
AEOI is an OECD initiative to combat cross-border tax evasion. Jurisdictions (countries) can participate in AEOI by signing a multilateral Competent Authority agreement (mCAA) with other participating countries.
By the end of June 2015, around 100 jurisdictions, including all EU member states, had signed up to AEOI. Implementation will take place in two phases:
- for 60 or so countries (including the EU member states, Jersey and the Cayman Islands), AEOI will take effect on 1 January 2016, with the first reporting taking place in September 2017;
- for other participating countries (e.g. Switzerland, Hong Kong and Singapore), this will happen on 1 January 2017, with the first reporting taking place in September 2018.
AEOI requires all financial institutions in Belgium to check if their account holders are tax resident in other AEOI countries. If so, the bank has to report these account holders to the FPS Finance, who will then pass on this information to the tax authorities for the country in which the account holder is resident for tax purposes.
Who does AEOI apply to?
In Belgium, AEOI applies to:
- legal entities and individuals who are resident for tax purposes in another AEOI country;
- certain legal entities (passive non-financial entities) whose beneficial owners are individuals who are tax resident in another AEOI country.
If a customer is tax resident in another AEOI country, BNP Paribas Fortis is required to report the following customer information to that country:
- Identification details
- Account balance
- Income on the accounts (interest and dividends)
- Gross proceeds from the sale of financial securities
The reporting requirements apply to current, savings, time deposit and custody accounts, insurance policies and annuities.
What does this mean specifically?
BNP Paribas Fortis will contact existing customers if:
- there are any indications that they are tax resident in another AEOI country;
- they are legal entities who need to clarify their AEOI classification;
- they are passive entities that need to identify their controlling persons (beneficial owners).
New customers will have to complete a self-certification form, so that we can ascertain whether they are tax resident in another AEOI country. Legal entities also have to declare their AEOI classification and patrimonial/passive entities have to certify the tax residence of their controlling persons.
