22/10/2018 - Last Tuesday, 16 October 2018, the OECD issued guidance for financial institutions on how to conduct enhanced due diligence procedures under the Common Reporting Standard (CRS) in order to ensure that certain residence and citizenship by investment (RBI/CBI) schemes do not get misused by account holders for the purpose of circumventing the CRS. The schemes included in the guidance are those that pose a high risk for being misused because of a low or zero rate of taxation of foreign financial income and the limited physical presence requirements attached to the RBI/CBI scheme.
The OECD is pleased to announce that jurisdictions are taking further action to prevent the misuse of RBI/CBI schemes by account holders by putting in place an exchange of information mechanism that will ensure that the information on applicants of RBI/CBI schemes will be made available to their jurisdiction(s) of tax residence. As a consequence of this action and further assurances and clarifications provided, certain RBI/CBI schemes have been removed from the guidance. The OECD is engaging with several more jurisdictions and will reflect any relevant developments in its guidance on an ongoing basis.