The International Tax Compliance Regulations 2015

Due diligence requirements U.K.

3.— [F1 (1) A reporting financial institution must establish and maintain arrangements that are designed to identify in respect of a financial account—

(a) the territory in which an account holder or a controlling person is resident for the purposes of—

(i) income tax,

(ii) corporation tax, or

(iii) any tax imposed by the law of that territory that is of a similar character to either of those taxes, and

(b) whether it is a reportable account.

(2) A reporting financial institution must comply with paragraph (1) by applying the due diligence procedures set out in the relevant agreement.

(2A) A reporting financial institution must keep a record of—

(a) the steps taken to comply with this regulation, and

(b) the information collected in the course of identifying the matters referred to in paragraph (1).

(2B) A reporting financial institution must keep the records required by paragraph (2A) for a period of—

(a) in respect of an account identified as a reportable account, five years beginning with the end of the year in which the account is last included in a return made under regulation 6(1), or

(b) in respect of an account which is not a reportable account, five years beginning with the end of the last year in which the reporting financial institution relied upon the due diligence procedures to treat the account as not being a reportable account.]

(3) The due diligence procedures are—

(a) in relation to a reporting financial institution under the DAC, set out in Annexes I and II to the DAC,

[F2 (b) in relation to a reporting financial institution under the CRS, set out in Sections II to VII of the CRS,]

(c) in relation to a reporting financial institution under the FATCA agreement, set out in Annex I to that agreement.

[F3 (4) A reporting financial institution under the CRS must—

(a) apply the rules in Section VII(B) of Annex I of the DAC instead of the equivalent rules in the CRS treating the reference to “each Member State” in that Section as a reference to “the United Kingdom”, and

(b) also apply the rules in Annex II of the DAC treating the references to “Member State” in that Annex as references to “participating jurisdiction” as defined in the CRS.

(4A) A reporting financial institution under the CRS must in respect of the following terms in the CRS—

(a) “pre-existing account”, and

(b) “related entity”,

apply to those terms the definitions as they appear in Annex I of the DAC instead of the definitions as they appear in the CRS.

(4B) Where a provision of the CRS does not specify a deadline for the requirements of that provision to be satisfied but there is an equivalent provision in Annex I of the DAC which does specify a deadline, then that deadline applies for the purposes of the provision in the CRS.]

(5) In applying the due diligence procedures, accounts within [F4 regulation 2(1)(b), (ba) and (c)] in respect of which no election under regulation 2(2)(c) has been made are treated as new accounts or pre-existing accounts as the case may be.

Textual Amendments

F1 Reg. 3(1)-(2B) substituted for reg. 3(1)(2) (17.5.2017) by The International Tax Compliance (Amendment) Regulations 2017 (S.I. 2017/598), regs. 1(1), 5(1)

F2 Reg. 3(3)(b) substituted (17.5.2017) by The International Tax Compliance (Amendment) Regulations 2017 (S.I. 2017/598), regs. 1(1), 5(2)

F3 Reg. 3(4)-(4B) substituted for reg. 3(4) (17.5.2017) by The International Tax Compliance (Amendment) Regulations 2017 (S.I. 2017/598), regs. 1(1), 5(3)

F4 Words in reg. 3(5) substituted (17.5.2017) by The International Tax Compliance (Amendment) Regulations 2017 (S.I. 2017/598), regs. 1(1), 5(4)