What does the Common Reporting Standard (CRS) mean for account holders?

If you hold financial accounts across borders, you may have come across terms like “CRS” and “FATCA”. These frameworks affect how your account information is reported to tax authorities worldwide, so it’s important to understand what they could mean for you as a tax resident in Ireland. On this page, we’ll look at the CRS meaning in banking, and what you need to know if you have financial accounts outside Ireland.

The information provided here is for informational and educational purposes only and does not constitute tax advice. You should consult with a qualified tax professional or adviser regarding your individual tax situation. Tax laws and regulations are complex and subject to change, and the information provided may not be applicable to your specific circumstances. We are not liable for any tax decisions or actions you take based on this information.

Short for Common Reporting Standard, it’s a global standard developed by the Organisation for Economic Cooperation and Development (OECD) for exchanging financial account information. CRS involves all EU member states and major financial centres, signalling a significant shift towards global financial transparency.

The purpose of CRS can be explained as a reporting framework that is designed to promote tax transparency and prevent offshore tax evasion.

More than 110 countries and jurisdictions have signed up to CRS, including all EU member states, major economies like Japan and the United Kingdom, and key financial centres such as Switzerland and the Cayman Islands.

Notably, the United States has not adopted CRS. Instead, it enforces its own system known as FATCA (Foreign Account Tax Compliance Act), which we’ll explore in more detail below.

The Common Reporting Standard in Ireland was introduced through DAC2 (the EU Directive on Administrative Cooperation) and came into effect on 1 January 2016.

It requires Irish financial institutions – including banks, credit unions, insurance companies, and brokers (referred to under CRS as reporting entities) – to identify account holders’ tax residency and report information on non-Irish residents to Revenue. 

Under CRS, Revenue shares this information with tax authorities in other participating countries, and likewise, Ireland receives financial data on Irish residents who hold accounts abroad.

Now you know what the Common Reporting Standard is, how does the Common Reporting Standard work in day-to-day banking? For account holders, it means that your financial institution may share your account details with tax authorities if you’re a non-resident or have accounts in other countries. 

If you’re an Irish tax resident who only has accounts in Ireland, you don’t need to take action. However, if you’re an Irish tax resident and you hold accounts in other countries – for example, a savings account in France, or a pension in Canada – it’s important to ensure your reporting obligations are in order. 

If you’re a tax resident of Ireland and opening an account in a CRS-participating country, you’ll be asked to self-certify your tax residency. If you declare Ireland as your tax residence, then details about that account may be automatically reported back to Revenue.

Similarly, if you are a non-resident holding a financial account in Ireland, you’ll be asked to complete a CRS self-certification, which will ask for details of your tax residence and your Tax Identification Number (TIN). If you’re a tax resident in a CRS-participating country, your account information will be reported to Revenue, which will then share it with your home country’s tax authority.

Your CRS status refers to your classification for tax purposes. In short, it indicates where you are considered a tax resident and determines whether your financial account information needs to be reported to a relevant tax authority. 

If you’re a tax resident of Ireland, your CRS status would be ‘Irish tax resident'.  

CRS status is important because it affects the automatic exchange of information between tax authorities. If your circumstances change – for example, if you move from Ireland to an address in another CRS jurisdiction – you should make sure your status is up to date.

CRS was developed and introduced by the Organisation for Economic Cooperation and Development (OECD) in order to combat global tax evasion. It ensures that individuals and entities can’t hide money offshore to avoid paying tax in their country of residence, and aims to create a level playing field where all taxpayers are held to the same standard.

While CRS legislation was created in 2014, it became effective in Ireland on 1 January 2016. The first deadline for financial institutions to submit their CRS reporting to Revenue in Ireland was 30 June 2017.

In the context of CRS, a Controlling Person is an individual who has control over a legal entity such as a company, trust, or foundation. The definition of control depends on the entity itself:

• Companies: Anyone holding more than 25% of shares or voting rights.

• Trusts: Settlors, trustees, protectors, beneficiaries, or others with effective control.

• Partnerships: Persons controlling capital, profits, voting rights, or operations.

Financial institutions must identify and report on any Controlling Persons who are tax residents in a CRS-participating jurisdiction.

Failure to comply with CRS obligations in Ireland may result in penalties and enforcement actions. While the main burden is on financial institutions, individuals can also be penalised for knowingly providing false information (false self-certification) and may be subject to prosecution under Irish tax law.

FATCA and CRS are both regulatory frameworks designed to combat tax evasion. However, there are some key differences. FATCA, short for Foreign Account Tax Compliance Act, is a tax transparency initiative introduced in the United States in 2010.

Unlike CRS, which applies to tax residents of any of the 110+ participating jurisdictions, FATCA applies only to U.S. citizens and residents. However, it works similarly to CRS, as it requires non-U.S. financial institutions to report information about accounts held by U.S. taxpayers to the relevant tax authority (the IRS) in order to identify and prevent U.S. taxpayers from hiding income and assets in foreign accounts.

If you’re a resident of Ireland, you must declare the interest earned on the deposits you sign up for through Raisin when filing your income tax return with Revenue.

Depending on which of our partner banks you save with, the country they are based in may apply a withholding tax to interest earned. However, in many European countries, you can reduce this withholding tax by sending us a certificate of tax residence in Ireland.

You will not be taxed twice on the interest earned through Raisin’s products, but it’s advisable to seek independent tax advice if you’re unsure about the implications.

Learn more about withholding tax in Ireland.

Raisin makes it simple for savers to open and manage savings accounts from beyond Ireland and access competitive rates from trusted banks offering savings account protection. Sign up today to compare accounts from more than 25 European banks and start seeing your money grow. 

Looking for more information? Check out our helpful guides to learn about how Raisin works and how to register for your Raisin Account.