The OECD was commissioned by the Finance Ministers of the G20 to develop a global standard for automatic exchange of data of financial accounts, very similar to the standard laid down in FATCA legislation and the resulting conventions, including the CUR IGA. That is the so-called ‘ Common Reporting Standard ‘ (CRS).

According to the CRS, financial institutions must provide data about accounts of individuals and organizations held in Curaçao. These persons and organizations are private companies, public limited companies and general partnerships that are tax resident or established abroad. In some cases, this also concerns data from the ultimate stakeholders of organizations with such an account.

Curaçao will pass on this information to the tax authorities of the countries of residence or establishment. These foreign tax authorities will check the data and use it for their tax purposes.  

Curaçao will receive information about foreign financial accounts from persons and organizations that have Curaçao as their tax residence or country of establishment. This does not automatically mean that you have to pay tax here in Curaçao. We will check the data first.

Law and regulations CRS 

The CRS was implemented on June 29, 2017 in the (Landsbesluit uitvoering internationale bijstandsverlening or LB LIBB). The identification and reporting requirements for reporting financial institutions with regard to the automatic exchange of information on the basis of the CRS are included in the LIBB. In accordance with  article 1a, paragraphs (a) and (b) of the LB LIBB, for the purposes of Section VIII, sub D, (4) and (5) of the CRS, the list of Reportable Jurisdictions and the List of Participating Jurisdictions  are listed on the website of the Ministry of Finance. We refer to these publications on subpage List of Jurisdictions.

More information about the CRS can be found on the website of the OECD, in the form of the OECD comment on both the CRS and the Model Competent Authority Agreement (Model CAA), a handbook and the FAQ’s (frequently asked questions) included in the handbook. In the FAQ’s interpretation or explanation of the OECD-commentary is given to explain and clarify (the meaning of) commentary. See https://www.oecd.org/content/dam/oecd/en/topics/policy-issues/tax-transparency-and-international-co-operation/crs-related-faqs.pdf

FATCA 

The FATCA preceded the development of the global standard, the CRS. The FATCA (Foreign Account Tax Compliance Act) is a US law requiring financial institutions (FI’s) worldwide to report annually to the US tax authorities, the Internal Revenue Service (IRS), on accounts that may be taxable in the US outside The United States. US tax law obliges ‘American persons’, wherever they live in the world, to file tax returns in the US. The extraterritorial effect of FATCA prompted the Dutch Kingdom on behalf of Curaçao reason to conclude the CUR IGA with the US to make such information provision by FI’s of financial data between the Curaçao and the US possible and mandatory. In the CUR IGA, Curaçao and the US have agreed that information on American and Curaçao taxpayers will be reported on a reciprocal basis by the Curaçao tax authorities and the IRS. The LIBB contains provisions intended to implement inter alia treaties to provide mutual assistance in the levying of taxes. This law contains a delegation basis that makes it possible to designate accounting authorities in lower regulations to provide the tax authorities with more detailed data and information.

Guidance 

Although the OECD has provided the CRS with an extensive commentary (CRS- commentary), questions have arisen in practice about the (implementation of the) CRS. The published guidance deals with these questions. See https://minfin.cw/wp-content/uploads/2024/06/FATCA-CRS-Guidance-EN-amended.pdf

For more information, please send us an e-mail: info.aeoi@gobiernu.cw