Understanding the Effects of the Amended CRS Law

Authored by: Kevin Zeman, Principal, Tax
Updated on: June 12, 2024

The Common Reporting Standard (CRS) (December 18, 2015), which governs the automatic sharing of financial account information for taxation purposes, has been amended. The Amended CRS Law (May 16, 2023) introduces a new requirement for reporting financial institutions related to data protection.

Under the Amended CRS Law, reporting financial institutions must formally inform individuals about the specific information they plan to share with the Administration des Contributions Directes (ACD). This notification must occur before sharing the data with the ACD, and clients must be given the opportunity to correct any inaccuracies in their personal data as per the General Data Protection Regulation (GDPR). The Amended CRS Law does not prescribe the method of communication for this personal data.

The Luxembourg data protection authority Commission Nationale pour la Protection des Données (CNPD) welcomed this amendment in a bill (December 2, 2022) focused on enhancing data sharing transparency. The CNPD believes that this increased transparency empowers individuals to exercise their right to correct data under GDPR, ensuring that accurate and current information is shared with the ACD in line with GDPR principles.

Individuals are advised to review the information they receive and promptly inform reporting financial institutions of any errors or changes. It's important to note that this new obligation is not a means for individuals to oppose data processing, as it is a legal requirement for reporting financial institutions.

Compliance with CRS reporting is crucial for investors as it promotes transparency and facilitates the exchange of financial information between countries. For private equity firms, adherence to these regulations is essential to manage risks, maintain a positive reputation, access global markets, and demonstrate their commitment to international tax transparency standards. Our Tax team is well-equipped to ensure accurate and timely completion of your FACTA & CRS reporting, giving you peace of mind.

If you have questions, contact us.

Published on: October 19, 2023