Another CRS question

[dvm]

Hi everyone,

A friend has a company in Georgia (not a member of CRS at the moment), which has a business account in a Lithuanian EMI. Is the EMI supposed to report the account transactions to the Georgian authorities?

 

[KDX]

Others can correct me but, as far as I know, CRS will report to the country⁠ where the UBO resides. Maybe you should also include information about the company and what⁤ it does? Active Non-financial entities (NFEs) are treated differently when CRS comes to play. Also,⁣ does your friend reside in Georgia? If so, then there won't be any CRS reporting⁢ since Georgia does not participate in the CRS.

 

[dvm]

The company⁣ is a tiny 1-person software development company, registered in the Virtual Zone of Georgia (0%⁢ corporate income tax, 5% tax on dividends). The fiend is a tax resident of Ukraine.︀

 

[KDX]

Did the EMI ever ask for any information⁠ about the UBO? any kind of CRS/AML forms? At this point, I won't say anything⁤ because I'm not sure if they'd be reporting or not but I'm sure that somebody⁣ else here can give you better insight. Either that or consult a tax expert which⁢ may be a smart thing to do if you are already "evading" tax via this︀ Georgia structure.

 

[Martin Everson]

Neither Ukraine or Georgia have started CRS reporting. Georgia will start exchanging in 2024 and‌ Ukraine in 2023. He can assume in worst case if EMI does CRS reporting it‍ will report to Ukraine in 2023 date for year 2022.

P.s Ukraine maybe wiped out⁠ by 2023 or become Russian territory by Christmas so CRS reporting may occur earlier smi(&%....joking.

 

[RexS9999]

According the the OECD website Georgia starts reporting in 2023.

 

[Martin Everson]

https://www.oecd.org/tax/transparency/AEOI-Commitments.pdf

 

[dvm]

Are you familiar with actual cases of retroactive CRS⁣ reporting?

 

[Martin Everson]

Explain more?

 

[dvm]

I was referring to your assumption that‌ when Ukraine joins CRS in 2023 they may get transaction reports for those that happened‍ in 2022 when Ukraine was still not a member of CRS.

 

[Martin Everson]

2023 is first reporting exchange date not⁠ joining date. So they would be reporting the previous years data (2022) like other countries⁤ by September 2023.

You can see below for example here Taiwan (China) reported 2020 data⁣ in August 2021.

https://www.mof.gov.tw/Eng/singleht...fbcc71?cntId=7af29087ed414e699e3c6e062e62daea

 

[kkein]

May I ask what EMI is that? To the best of my knowledge, very few EMI⁠ allow Georgian biz accounts..