Guidance and definitions (CRS)
If you have any questions after reading this, please speak to your Navro contact or email compliance@navro.com
Guidance: please read this before you complete the form
Why we are asking you to complete this form
Regulations based on the OECD Common Reporting Standard (“CRS”) require financial institutions like Navro to collect and report information about where our customers are tax resident. This includes entity customers, such as companies, partnerships, trusts and foundations. Under these regulations, we have to ask you to provide the information requested in the form.
About tax residence
Each country/jurisdiction has its own rules for defining tax residence. In general, an entity is a tax resident in the country where it pays corporate income taxes. For more information on tax residence, please seek specialist advice or consult the information on the OECD website:
What you need to do
As a business customer of Navro, you need to complete the form even if you have already given us information about your business's tax status in the past. This applies to all companies, partnerships and other entities, but not to sole traders or individuals.
What we will do with this information
We will keep a record of the form on the entity's file. If we hold an account for the entity in one country/jurisdiction, but the entity is tax resident in a different country/jurisdiction, we may be legally obliged to pass on the information in the form, and other details about the entity's accounts, to the tax authority in the country/jurisdiction where the account is held or where the entity is tax resident.
It is important that we hold the right information about the entity. If any of this information changes, you must tell us by sending us an updated form.
Before you begin
You will need the entity's Taxpayer Identification Number (TIN), or the equivalent, for each country/jurisdiction where the entity is tax resident.
A TIN is a unique combination of letters or numbers assigned by tax authorities to identify individuals and entities for tax purposes. Some authorities do not issue a TIN but use a similar type of number instead, such as a company registration number. If you are not sure of the entity's TIN or its equivalent, further details on what is acceptable can be found on the OECD website:
Where to go for help
If you have any questions about the information requested in the form, please speak to your Navro contact or email compliance@navro.com. You can find more information about the CRS, and the governments taking part, on the OECD website:
Navro is not able to give tax advice, so if you're not sure what the entity's tax residence status is, please visit the OECD website or speak to a professional tax adviser. Definitions of the key terms used in the form follow below.
Definitions
These are selected definitions provided to help you complete the form. Further details can be found in the OECD Common Reporting Standard for Automatic Exchange of Financial Account Information (the “CRS”), the associated Commentaries to the CRS, and domestic guidance, available at:
https://www.oecd.org/en/networks/global-forum-tax-transparency.html
OECD amendments to the CRS are adopted by each implementing jurisdiction based on its own timeline. As a result, some of the definitions below only generally apply if the jurisdiction where you are tax resident has implemented the relevant CRS amendments. If you have any questions, please contact your tax adviser or domestic tax authority.
“Account Holder” The person listed or identified as the holder of a Financial Account. A person, other than a Financial Institution, holding a Financial Account for the benefit of another person as an agent, a custodian, a nominee, a signatory, an investment advisor or an intermediary, is not treated as the Account Holder. In these circumstances that other person is the Account Holder.
“Active NFE” An NFE is an Active NFE if it meets any of the criteria listed below. In summary, those criteria refer to: (a) Active NFEs by reason of income and assets – less than 50% of the NFE's gross income for the preceding period is passive income and less than 50% of its assets produce or are held for the production of passive income; (b) publicly traded NFEs, or an NFE that is a Related Entity of a publicly traded company; (c) Governmental Entities, International Organisations, Central Banks, or entities wholly owned by one or more of the foregoing; (d) holding NFEs that are members of a nonfinancial group; (e) start-up NFEs that are investing capital into a business other than that of a Financial Institution, provided the exception does not apply after 24 months from formation; (f) NFEs that are liquidating or emerging from bankruptcy; (g) treasury centres that are members of a nonfinancial group; or (h) non-profit NFEs meeting the conditions set out in the CRS.
“Control” Control over an entity is generally exercised by the natural person(s) who ultimately has a controlling ownership interest in the entity. Where no natural person(s) exercises control through ownership interests, the Controlling Person(s) will be the natural person(s) who exercises control through other means, or, failing that, the natural person who holds the position of senior managing official.
“Controlling Person” A natural person who exercises control over an entity, unless the entity is a company that is publicly traded or its majority owned subsidiary. Where the entity is a Passive NFE, a Financial Institution must determine whether such Controlling Persons are Reportable Persons. This corresponds to the term “beneficial owner” under FATF Recommendation 10.
“Entity” A legal person or a legal arrangement, such as a company, organisation, partnership, trust or foundation.
“Financial Account” An account maintained by a Financial Institution, and includes Depository Accounts, Custodial Accounts, and equity and debt interests in certain Investment Entities, Cash Value Insurance Contracts, and Annuity Contracts.
“Financial Institution” A “Custodial Institution”, a “Depository Institution”, an “Investment Entity”, or a “Specified Insurance Company”. Please see the CRS and relevant domestic guidance for the full classification criteria that apply to Financial Institutions.
“Investment Entity” Broadly, any entity that primarily conducts as a business one or more of: trading in money market instruments, foreign exchange, transferable securities or commodity futures; individual and collective portfolio management; or otherwise investing, administering or managing financial assets or money on behalf of other persons; or whose gross income is primarily attributable to investing, reinvesting or trading in financial assets, where the entity is managed by another Financial Institution.
“NFE” Any entity that is not a Financial Institution.
“Participating Jurisdiction” A jurisdiction with which an agreement is in place under which it will provide the information set out in the CRS.
“Passive NFE” Under the CRS, a “Passive NFE” means any NFE that is not an Active NFE. An Investment Entity located in a Non-Participating Jurisdiction and managed by another Financial Institution is also treated as a Passive NFE.
“Related Entity” An entity is a “Related Entity” of another entity if either entity controls the other, or the two entities are under common control (including direct and indirect ownership of more than 50% of the vote and value).
“Reportable Account” An account held by one or more Reportable Persons, or by a Passive NFE with one or more Controlling Persons that is a Reportable Person.
“Reportable Jurisdiction” A jurisdiction with which an obligation to provide financial account information is in place.
“Reportable Person” An individual or entity that is tax resident in a Reportable Jurisdiction under the laws of that jurisdiction. Where the Account Holder is a Passive NFE, a Reportable Person also includes any Controlling Persons who are tax resident in a Reportable Jurisdiction.
“TIN (including “functional equivalent”)” “TIN” means Taxpayer Identification Number, or a functional equivalent in the absence of a TIN. A TIN is a unique combination of letters or numbers assigned by a jurisdiction to an individual or entity and used to identify them for tax purposes. Some jurisdictions do not issue a TIN but use another high-integrity number instead, such as a business/company registration number.
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