CRS (Common Reporting Standard) is a unified standard for providing tax authorities with information on accounts held in one country by tax residents of other countries. CRS was developed by Organization for Economic Cooperation and Development (OECD) and was adopted as the EU Directive. The CRS was introduced with a view to counteract tax evasion by tax residents of the participating countries who hold their accounts abroad.
In Poland, the provisions of CRS were implemented by the Act of 9 March 2017 on Exchange of Tax Information with Other Countries (the “CRS Law”).
The CRS Law imposes on Polish banks (and other Polish financial institutions) an obligation to identify and report data of their clients being tax residents of other countries to tax administration authorities of the country of client’s tax residence (via the Polish Chief of the National Tax Administration).
The information obtained is to be – from time to time – provided by tax authorities of a given country to tax authorities of the countries where those account holders are residents.
CRS Law imposes on the banks (and other financial institutions) an obligation of identification of accounts classified to reporting (e.g. debit or credit card account) by way of identifying whether any financial accounts within the meaning of CRS, maintained by the bank are held by at least one reported person.
The CRS obligations relate to natural persons as well as to institutional and corporate entities being non-Polish residents but holding bank account(s) in Poland. We focus below on the rules applicable to the institutional/ corporate entities.
With respect to institutional clients, a reported person is (with certain exceptions) an entity being tax resident in a country other than Poland under the tax law of that country.
Such entities as partnership, limited partnership, limited liability company, joint-stock company or similar entities which have no residence in Poland for tax purposes are treated as residents in a country where they have a place of effective management.
If the bank, during the performance of its obligations under the CRS Law establishes that it is necessary to obtain a statement on tax residence for CRS purposes, it will request the account holder (e.g. company, partnership, etc.) to provide adequate explanations, documents or a valid statement on tax residence for CRS purposes. In the event that the account holder refuses to provide the requested explanations, the bank will provide the respective tax authority (via the Polish Chief of the National Tax Administration) with information on that account.
Regardless of the fact of making a statement on tax residence for CRS purposes, the bank is obliged to verify the viability of client’s statement and for that purpose it may request additional documents and/ or information from the client.
In the event you declare that your company’s tax residence is outside Poland or has a status of passive non-financial entity with at least one actual beneficial owner having tax residence outside Poland, the bank will report to tax administration authorities of the country of your firm’s tax residence or its beneficial owner (via the Chief of the National Tax Administration) with the data on the account and its holder. The data provided will include (without limitation): name, address, tax identification number, account number, account balance or value and the amount of interest.
With regard to passive non-financial entities, reporting obligations include also providing tax administration authorities of the country of actual beneficial owner’s tax residence with the data of that beneficial owner. The data provided will include (without limitation): name and surname, address, country or countries of residence, tax identification number, date and place of birth of actual beneficial owner.