What is CRS?

The CRS - Common Reporting Standard - is a standard developed by the OECD (Organisation for Economic Co-operation and Development) for the automatic exchange of information that enables participating countries to share bank account information with each other. The purpose of CRS is to promote the prevention of tax evasion and tax fraud through an exchange of information between the participating countries.

On 19 March 2014 Hungary, among many other countries, agreed to introduce this model early on (on 1 January 2016).

The European Union, in response to the establishment of CRS, added to the automatic exchange of information that was introduced in 2011 information on financial accounts by accepting Directive 2014/107/EU of the European Council.

In Hungary, the provisions on the automatic exchange of information were promulgated in Act XXXVII of 2013 on the rules of international public administration cooperation related to taxes and other public duties (hereinafter: Aktv.) as well as in Act CXCII of 2015 on the amendment of certain acts. (Hereinafter the provisions of the Aktv. regarding the automatic exchange of information shall be referred to as the CRS Act.)

Pursuant to the CRS Act, it will be necessary to check the residence of our customers starting from 1 January 2016.

The CRS Act introduced a reporting obligation for Hungarian Financial Institutions to the National Tax and Customs Administration (NAV) and, through it, to the relevant authorities of the countries participating in the agreement on the exchange of information. The reporting obligation applies to persons (natural persons and legal Entities) that

are considered Reportable Persons and the holders of accounts that fall within the scope of the CRS Act (see a detailed description below under the questions "Which customers' data must be provided and which are these data?"),
and the accounts of legal entities (e.g. legal persons and other organisations) the controlling person of which (beneficial owner) is considered a Reportable Person.

The implementation of the CRS Act is obligatory for all Hungarian Financial Institutions (banks, investment enterprises, etc.).

The implementation of the CRS regulation will start on 1 January 2016 in the countries participating in the agreement on the exchange of information, that is, practically in all countries that have a developed financial market (such as, for example, in the EU member states), then in the other countries that will sign the treaty later on.

What is the difference between FATCA and CRS?

The due diligence of our customers is performed pursuant to the FATCA regulations (additional information is available under the FATCA menu) to determine the customers and accounts whose data must be handed over to the Tax Authority of the United States. The purpose of the due diligence conducted pursuant to the CRS regulation is to determine the customers and accounts whose data must be handed over to the relevant authorities of OECD countries and those EU countries that signed the agreement on the automatic exchange of information. Both with regard to FATCA and CRS, reports are sent to NAV, and NAV forwards the data to the relevant authority (authorities).

We have made available a single form for our customers that can be used to provide a declaration both pursuant to the FATCA and the CRS Acts in order to alleviate the administrative burden imposed by the statutory regulations.

Who does CRS apply to?

Pursuant to the CRS Act:

Our account holder customers (account holders, co-account holders) must be checked to see if it is necessary to hand over their data to NAV and, via NAV, to the relevant authorities of the member states that are signatories of the agreement on the exchange of information. For this purpose, our bank may contact certain customers.

Customers who

wish to open a new account, or
wish to modify their data

must also be checked to see if it is necessary to hand over their data to NAV and to other authorities.

How is the due diligence conducted?

In the case of customers who have existing Financial Accounts (e.g. current account, savings accounts, securities account) with CIB Bank Ltd as of 31 December 2015, we will review their previously provided data on the basis of which the Bank determines residence for tax purposes. In certain cases (e.g. foreign data or an account that is considered a High Value Account pursuant to the CRS Act) a separate declaration must be made regarding residence for tax purposes.
Customers who wish to open a new account or modify their data must provide a declaration regarding their residence for tax purposes.
In the cases specified by law - (e.g. if data indicate residence abroad) CIB Bank Ltd may request additional data.

The due diligence and - if necessary - the handover of the data is required in order to satisfy the obligations set forth by law.

The following must be taken into account when determining the residence for tax purposes and the reporting obligation:

In the case of private persons, sole traders, landowner farmers:

Certified permanent address or regular residence
certified residence for tax purposes,
mailing address (including post office boxes),
telephone number in another country in the absence of a Hungarian phone number
standing orders to an account in another member state or country (that is not associated with a Deposit Account),
valid authorisation or right to sign given to a person that has an address in a member state or another country,
"poste restante" or "agent for the service of process" mailing address in a member state or another country.

In the case of legal Entities (legal person, other organisation, institution, corporation, etc.):

place of registration (place of establishment)
registered office
other address
residence for tax purposes of controlling persons (beneficial owners)

Which customers' data must be provided and which are these data?

Pursuant to the CRS Act, our bank must hand over the data of persons who are resident for tax purposes in an EU member state or in a country that is a signatory to CRS and/or of non-natural persons that are controlled by such persons and are not considered financial entities, with the exception of the following:

a company whose stocks are regularly traded on one or more regulated securities markets, or an affiliated entity of such a company,
Governmental Entity,
International Organisation,
Central Bank,
Financial Institution.

The following data must be provided:

Account holder's name, address, tax identification number (if any), and in the case of natural persons, the place and date of birth
Name, address, tax identification number, place and date of birth of the Controlling Reportable Person (beneficial owner).
Account number
Account balance or value (at the end of a given year or at the time of termination)
In the case of custodianship accounts, the gross interest and dividend paid or credited to the account in the tax year, as well as other gross income generated in relation to the instruments held on the account, gross income from the sale or redemption of financial instruments where CIB Bank Ltd. is the custodian, broker, authorised entity or other type of proxy
In the case of deposit accounts, the gross amount of credited or paid interest
In the case of other accounts, the gross amount of the payment or credit to the Account Holder in relation to the account where CIB Bank Ltd. is the obliged party or debtor
Name and identification number of the Reporting Hungarian Financial Institution

If the CRS Act stipulates the obligation to request a declaration, we ask our customer to issue a declaration. Our bank may request additional documents (e.g. deed certifying residence for tax purposes) based on the available information (e.g. if the data indicates residence in a member state or another country).

Can one refuse to issue a declaration?

After 1 January 2016 if a customer refuses to issue a declaration or fails to submit the requested documents, then pursuant to the regulations we will hand over to NAV (and via NAV, to the authorities of the relevant states) the data of this customer and his/her account(s) in the cases specified in CRS. However, these customers may also issue a declaration at any time and will receive information about the reporting obligation under the law.

How can one issue a declaration?

In person, at any of our branches
Our private person, sole trader and landowner farmer customers who have exclusively Hungarian data may issue a declaration via the CIB24 telephone customer service. These customers will receive a written confirmation of the declaration they issued.

How many times do I have to issue a declaration?

Each person (private person, Entity) must submit a single valid declaration per financial institution, and this declaration can be modified or retracted at any time. However, the declaration must be repeated if the customer's residence changes to a different country (e.g. the customer moves to Italy or moves back to Hungary), or if anything changes in the previous declaration. In this case additional documents may have to be submitted.

Downloadable documents

The following guidelines may be helpful if you issue a CRS declaration as a private person, a sole trader or a landowner farmer.

Instructions to complete the declarations for private persons >>

The following guidelines may be helpful if you issue a CRS declaration as an entity (company, organisation, institution, municipality, etc.)

Instructions to complete the declarations for legal entities>>