In June 2019, the Organization for Economic Cooperation and Development (OECD) announced the release of an international administrative and operational framework for the exchange of information collected under the OECD model of Mandatory Disclosure Rules (MDR) starting on January 1, 2021. The framework supports the automatic exchange of information collected in relation to the Common Reporting Standard (CRS) regime.
In this regard, the OECD also released updated XML schemas and user guides to support the electronic exchange of tax information. The XML schema is a data reference document designed to ensure that all jurisdictions follow common data categorization and naming conventions that will enable the structured collection and exchange of information on CRS avoidance agreements and opaque offshore structures of tax administrations.
The updated user guides and XML schemas reflect the experience of the first exchange and are based on a Multilateral Competent on Authority Agreement (MCAA). Moreover, the MCAA intends to enable tax authorities to use the information received to carry out compliance activities, regarding taxpayers and intermediaries involved in the disclosed agreements.
The development of XML-based information exchange represents the further digitalization of the tax administration on a broader basis. This process change is not a short-term trend but has already a significant impact on both tax strategy and policy and on the day-to-day operations of tax departments. Consequently, financial institutions are advised to review the OECD XML schemas and associated user guides in the immediate and the long-term strategic perspective.
Are you already prepared for the new CRS reporting schema?
We address the new modifications on our tax reporting platform FiTAX, a standard software solution for financial institutions to generate tax reports for tax authorities around the world. The reporting software fulfills the reporting requirements of the CRS, FATCA, QI, QDD and DAC6/MDR regimes. More than 3’200 financial institutions are reported every year with FITAX in 130+ countries.