HMRC stops automated financial accounts data exchange
Silently and surprisingly HMRC stopped exchanging CRS data between the United Kingdom and Russian Federation, as arose from the official document.
The UK automatically exchanges financial account information with the US under FATCA, with British Crown Dependencies under CDOT agreement and with several foreign jurisdictions under CRS. Russia was on the HMRC list in 2017, but not in 2018.
Russia joined the CRS by signing the Multilateral Agreement on the Exchange of Financial Account Information at the International Tax Administration Forum in Beijing on 12 May 2016.
Russia’s adoption of the CRS and the commencement of the exchange of financial account information with foreign jurisdictions affected not only financial organisations. Businesses faced the burden of having to identify clients and submit CRS reports, and also clients of those organisations, both individuals and companies, who are since 2016 required to provide information on their tax residence and often that of persons who directly or indirectly control them. Corporate clients also had to determine and disclose their CRS status.
The information in question may be used by Russian tax authorities, among other things, in checking that Russian taxpayers have correctly fulfilled their tax obligations.
The sovereign decision of the United Kingdom to stop the exchange of CRS data with Russia means that the Russian Federal Tax Service will not receive any electronic data about Russian citizens financial accounts in the UK for 2018.