The electronic reporting of 2020 financial account information in tax matters (CRS) was completed smoothly on August 2, 2021. According to the statistics provided by the Fiscal Information Agency, Ministry of Finance, 1,764 financial institutions reported data; 130,487 accounts are Reportable Accounts held or controlled by the tax residents of Australia, Japan, or the U.K. The total balance on Dec. 31, 2020 and the total payment of dividends, interest, or other income to those Reportable Accounts are listed below in $NTD:
| Country |
Number of Reportable Accounts |
Balance of Reportable Accounts |
Payment to Reportable Accounts |
| Australia |
19,200 |
204.5 billion |
20.1 billion |
| Japan |
94,967 |
1,518.6 billion |
37.1 billion |
| The U.K. |
16,320 |
84.6 billion |
11.8 billion |
| Total |
130,487 |
1,807.7 billion |
69.0 billion |
The Ministry of Finance explains that the above-mentioned numbers of financial accounts and amounts of balance and payments indicate that Taiwan has close economic, trade, and investment ties with Australia, Japan, and the U.K. The proceeding cooperation in exchange of information in tax matters has substantial meaning and therefore increases international tax transparency effectively.
Compared with the reporting data of the previous year, the sum of the accounts held or controlled by tax residents of Australia and Japan increased by 203%, with the total account balance rising by 62% and the payment growing by 323%. A possible reason for the increase in numbers and amounts above is because financial institutions, according to the “Regulations Governing the Implementation of the Common Standard on Reporting and Due Diligence for Financial Institutions” (hereinafter referred to as “the Regulations”), should have completed their due diligence procedures on all Preexisting Lower Value Individual Accounts and Preexisting Entity Accounts by the end of 2020, and reported relevant account information this year
| Year |
2021 |
2020 |
Growth rate |
| Accounts |
114,167 |
37,697 |
203% |
| Account balance |
1,723.1 billion |
1,060.8 billion |
62% |
| Payment |
57.2 billion |
13.5 billion |
323% |
The Ministry of Finance further indicates that it is common to see financial institutions misunderstand the necessity of the reporting element’s input type “(Optional) Mandatory” and therefore do not report such required information. The Ministry of Finance and the National Taxation Bureaus have been assisting financial institutions in avoiding or correcting such mistakes. This year, since financial institutions should report accounts held or controlled by U.K. tax residents for the first time and the preexisting accounts of all kinds, the amount of the reporting data increased significantly. Thus, there were still some missing “(Optional) Mandatory” elements of the reported accounts. The Ministry of Finance reiterates that CRS elements marked as “(Optional) Mandatory” are in principle mandatory for CRS reporting. Only when the laws or regulations prescribe otherwise and the information is not available to the financial institution, can the absence of such information be made an exception to the reporting requirement. For example, the Tax identification number (TIN) is one of the “(Optional) Mandatory” elements. Only if the requirements set forth in Subparagraph 1 of Paragraph 2 of Article 50 of the Regulations are met and the financial institution does not have those Preexisting Accounts’ TIN information after performing due diligence procedures may those data elements be left blank this year. However, financial institutions are still required to make reasonable efforts to obtain the TIN(s) information by the end of this year.
The Ministry of Finance points out that, for this year, financial institutions should use the 2.0 version of the CRS XML Schema to report CRS information. Furthermore, due to the impact of the COVID-19 pandemic, the CRS reporting period was extended to August 2. The Ministry of Finance appreciates that financial institutions are supporting and complying with the policy and the regulations. The National Taxation Bureaus will continually to examine the reporting data (including the above-mentioned “(Optional) Mandatory” elements) and assist financial institutions in making corrections in order to improve the quality of the exchange of information. The automatic exchange of financial account information will be carried out in September with Australia, Japan, and the U.K.
The Ministry of Finance emphasizes that the CRS information exchanged within the international community is for tax authorities to evaluate the risk of tax evasion and select auditing cases accordingly. The exchanged CRS information is not for tax assessment directly. Honest taxpayers do not need to worry that the CRS information will increase their tax burdens.
Contact person: Ms. Yu- Hsuan Wang, Section Chief.
Contact Number: (02)2322-8183