FATCA and CRS

Services

Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS)

FATCA & CRS Reporting Solutions for Offshore Financial Institutions

CityLinkers delivers end-to-end FATCA/CRS services for regulated offshore centers (notably the Cayman Islands and the British Virgin Islands). Our team aligns entity classification, onboarding, due diligence, XML reporting, portal setup, and enforcement-readiness with the latest Automatic Exchange of Information (AEOI) requirements to minimise operational disruption and regulatory risk. We implement up-to-date Cayman DITC and BVI ITA processes, upgraded CRS XML/CARF touchpoints, and GIIN/FFI list management for counterparty assurance.

What Are FATCA and CRS?

FATCA (Foreign Account Tax Compliance Act) and CRS (Common Reporting Standard) are international tax information exchange frameworks designed to combat cross-border tax evasion. FATCA was enacted by the United States in 2010, requiring foreign financial institutions (FFIs) to report information about financial accounts held by U.S. persons. CRS, developed by the OECD in 2014, is a broader global standard with over 100 participating jurisdictions exchanging financial account information annually. Hong Kong has implemented both regimes through domestic legislation:

FATCA: Implemented via the Intergovernmental Agreement (IGA Model 2) with the United States
CRS: Implemented via the Inland Revenue Ordinance (Cap. 112), Part 8A, effective from 2017

Who Needs to Comply with FATCA and CRS in Hong Kong?

Financial Institutions (FIs) established in Hong Kong must comply with FATCA and CRS obligations. The definition of a Financial Institution under both regimes includes:

Custodial Institutions — Entities that hold financial assets for others (e.g., custodian banks)
Depository Institutions — Banks and deposit-taking institutions
Investment Entities — Including SFC-licensed corporations (Type 1, 4, 9), fund managers, trust companies, and investment advisers
Specified Insurance Companies — Insurance companies that issue cash-value insurance or annuity contracts

If your firm holds an SFC licence, operates a fund, provides trust services, or engages in investment management, you are likely a Reporting Financial Institution with FATCA and CRS obligations.

What Are the Key Compliance Obligations?

Reporting Financial Institutions must fulfil several core obligations: Registration: FIs must register with the IRS for a Global Intermediary Identification Number (GIIN) for FATCA, and register with the Inland Revenue Department (IRD) for CRS. Due Diligence: FIs must identify and classify all account holders as Reportable Persons, U.S. Persons, or non-reportable. This involves self-certification forms, TIN (Tax Identification Number) collection, and electronic record searches for pre-existing accounts. Reporting: Annually, FIs must report specified financial account information to the IRD, which then exchanges the data with relevant partner jurisdictions. Reportable information includes account balances, interest, dividends, and gross proceeds. Compliance Policies: FIs must maintain written policies and procedures for FATCA/CRS compliance, including account onboarding, ongoing monitoring, and staff training.

How Does CityLinkers Support FATCA/CRS Compliance?

CityLinkers provides comprehensive FATCA and CRS compliance services:

Registration and Onboarding — Registering your firm with the IRS and IRD, obtaining GIIN and CRS registration numbers
Account Classification — Reviewing and classifying all financial accounts under FATCA and CRS rules
Self-Certification Management — Designing and collecting self-certification forms from account holders
Annual Reporting — Preparing and submitting annual FATCA and CRS reports to the IRD
Compliance Documentation — Drafting FATCA/CRS policies and procedures, AML integration documents
Staff Training — Providing FATCA/CRS training for compliance and operational staff
Gap Analysis and Remediation — Conducting compliance reviews and addressing identified gaps

What Are the Penalties for Non-Compliance?

Non-compliance with FATCA and CRS requirements carries significant consequences:

Financial Penalties: The IRD may impose penalties for late filing, incorrect reporting, or failure to maintain proper records. Penalties can range from HK$10,000 to substantial amounts for serious breaches.
Withholding Tax (FATCA): Non-compliant FFIs face 30% withholding tax on U.S.-source payments under FATCA.
Reputational Risk: Regulatory non-compliance can damage your firm's reputation and relationships with counterparties.
SFC Implications: For SFC-licensed corporations, FATCA/CRS non-compliance may constitute a breach of fitness and properness requirements.

What Is the CRS Reporting Timeline?

The CRS reporting cycle follows an annual calendar:

January–June: Account due diligence and classification for the preceding year
May–June: Preparation of CRS return data
By May 31: Deadline for submitting CRS returns to the IRD (for most institutions)
Ongoing: New account onboarding and self-certification collection

What is the difference between FATCA and CRS?

FATCA is a U.S. law requiring reporting of accounts held by U.S. persons, implemented via bilateral agreements. CRS is a global OECD standard with over 100 participating jurisdictions reporting on each other's tax residents. CRS has a broader scope but similar operational requirements.

Is my SFC-licensed corporation required to comply with FATCA and CRS?

Yes. SFC-licensed corporations are classified as Investment Entities under both FATCA and CRS. They must register, conduct due diligence on account holders, and file annual reports with the IRD.

What is a GIIN and how do I obtain one?

A GIIN (Global Intermediary Identification Number) is a 19-character identifier assigned by the IRS to FATCA-registered financial institutions. You obtain it by registering on the FATCA Registration Portal. CityLinkers can assist with the entire registration process.

What information must be reported under CRS?

For each reportable account, FIs must report: account holder's name, address, TIN, account number, account balance at year-end, and gross amounts of interest, dividends, and other income paid during the year.

How often must FATCA and CRS reports be filed?

Both FATCA and CRS reports are filed annually with the Hong Kong Inland Revenue Department. The typical filing deadline is May 31 of the following year. FIs must also maintain due diligence records for at least five years.

What is a self-certification form?

A self-certification form is a document completed by the account holder declaring their tax residency status. It is the primary tool for classifying new accounts under CRS. The form collects the account holder's name, address, TIN, and jurisdiction of tax residence.

Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS)