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Explanatory decree regarding the scope of Financial Accounts on which Reporting Financial Institutions shall perform due diligence and reporting

The Ministry of Finance announced that, for the purposes of responding to the new international information-transparency standard and of reciprocally conducting automatic exchange of financial account information in tax matters, the Ministry released the explanatory decree no.10724521950 on January 31, 2019 with reference to the “Common Standard on Reporting and Due Diligence for Financial Account Information” (CRS) as well as practices adopted by other jurisdictions. The decree clarified the scope of financial accounts on which reporting financial institutions shall perform due diligence and reporting in accordance with the “Regulations Governing the Implementation of the Common Standard on Reporting and Due Diligence for Financial Institutions” (the CRS Regulations). 

 The Ministry explained that, Reporting “Financial Institutions” shall perform due diligence on their managed “Financial Accounts,” and report information of reportable accounts once identified. “Financial Institutions” includes four types: Depository Institutions, Custodial Institutions, Investment Entities, and Specified Insurance Companies, while “Financial Accounts” also includes four types: Depository Accounts, Custodial Accounts, equity or debt interest in an Investment Entity, and Cash Value Insurance Contracts and Annuity Insurance Contracts. The types of institutions do not necessarily correspond to the types of accounts. Financial Institutions of any type shall perform due diligence and reporting on managed Financial Accounts of all types.

The Ministry further elaborated that banks, securities investment trust enterprises, securities investment consulting enterprises, securities firms, and insurance companies in the Republic of China (Taiwan) conducting trust businesses concurrently based on relevant financial laws and regulations, with their ordinary business constituting any type of “Financial Institutions” in the CRS Regulations, shall perform due diligence and reporting on all types of managed Financial Accounts (including Custodial Accounts holding Financial Assets for the benefits of other persons, which are brought forth from conducting trust businesses concurrently). 

The Ministry of Finance stated that, in order to complete the CRS mechanism and ensure that Reporting Financial Institutions in the Republic of China (Taiwan) perform due diligence procedures consistent with international standards, the Ministry has incorporated CRS-related information on its website (http://www.mof.gov.tw, Home>Announcements>International Fiscal Affairs>Exchange of Information for Tax Purposes) for the public to browse, and urges Reporting Financial Institutions to follow relevant regulations from 2019.

Issued:Dept. of International Fiscal Affairs Release date:2019-03-25 Last updated:2021-11-03 Click times:223