New Zealand Law Society - What are your Common Reporting Standard obligations?

What are your Common Reporting Standard obligations?

This article is over 3 years old. More recent information on this subject may exist.

The Common Reporting Standard (CRS) came into effect in New Zealand on 1 July 2017 and disclosures for the initial reporting period ending 31 March 2018 are due to Inland Revenue by 30 June 2018. Financial institutions play a pivotal role in this global initiative but there are also requirements for intermediaries and law firms. Do you know what is expected of you to meet that deadline?

The information in this article is a high-level summary (with some exceptions) to help you determine whether you or your clients may have obligations under the CRS law in New Zealand. It does not constitute a ruling or binding legal advice.

The CRS is a multilateral initiative of the Organisation for Economic Co-operation and Development (OECD) that aims to combat global tax evasion, with a hundred countries, by automatically sharing information about foreign tax residents that invest outside of their jurisdiction of tax residence.

To achieve that:

  • Financial institutions must carry out due diligence on their account holders (and, in certain circumstances, controlling persons) to identify relevant foreign tax residents;
  • Financial institutions must annually report (disclose) prescribed identity and financial information about such accounts to Inland Revenue. (Financial institutions will need to register with Inland Revenue as a pre-condition to being able to report such account information. The example below illustrates how this registration requirement applies in practice – in the context of financial institution trusts that have reportable accounts);
  • Financial institutions must keep records of their compliance with these due diligence and reporting obligations; and
  • Intermediaries, account holders, and controlling persons that are connected with financial accounts must assist the financial institution that maintains these accounts in carrying out these obligations (ie, responding truthfully and completely to requests for information about their tax residency).

Inland Revenue will exchange the reported information with the person’s jurisdiction of tax residence (if that jurisdiction is a Reportable Jurisdiction). This will improve the transparency of off-shore investments, and help to combat global tax evasion.

The CRS information chain

Law firms are an important part of the wider ‘CRS information chain’ so you are likely to have due diligence, reporting and record-keeping obligations as an organisation and on behalf of your clients. These obligations are set out in the Tax Administration Act 1994. Law firm clients (and their controlling persons), in turn, have obligations to respond to their lawyers’ requests for this CRS information, in a timely manner.

Law firms and clients (and their controlling persons) can be subject to civil (and potentially criminal) penalties if they fail to comply with these obligations.

Although law firms are unlikely to be financial institutions themselves they may still have CRS obligations:

  • They may set up or manage entities (such as corporate trustees and trusts) that can (depending on the circumstances) be financial institutions with CRS due diligence and reporting obligations;
  • They may manage trust accounts (for clients) with other financial institutions (such as banks). In this context, the law firm will need to obtain information about the tax residency of their clients (and their controlling persons) and provide this information to that institution (ie, obtaining and providing information to the bank), so that the institution is able to comply with its own CRS due diligence and reporting obligations. Law firm clients will, in turn, have obligations to respond to their lawyers’ requests for this information.

New industry self-certification forms developed in conjunction with the New Zealand Law Society, New Zealand Bankers Association and Inland Revenue assist law firms to comply with their statutory obligations to collect and pass on information about their trust clients (and their controlling persons) to their bank(s). The Entity Tax Residency Self-Certification and Individual Tax Residency Self-Certification forms can be found on the New Zealand Bankers Association website. Further information is available via

Trusts (and their corporate trustees) with CRS reporting obligations

Inland Revenue has received a number of questions about how financial institution trusts can register with Inland Revenue and report for CRS purposes (ie, if they have any reportable accounts).

Trusts can sometimes be financial institutions for CRS purposes – with CRS due diligence and reporting obligations. This will generally be where such trusts (including trustee documented trusts and certain foreign trusts).

A New Zealand financial institution (NZFI) trust will be a Non-Reporting NZFI trustee documented trust if it uses a trustee that is a reporting financial institution, to duly carry out its CRS obligations. The financial institution trustee will report to Inland Revenue on the trust’s behalf if the trust has any account to report. Although the financial institution trustee will report any accounts to Inland Revenue on the trust’s behalf, the trust itself will still be required to be registered with Inland Revenue, for CRS purposes if they’re managed by another financial institution (such as a financial institution corporate trustee or asset manager), and derive their income mainly from financial assets.

Registration – Trusts

In order for the trust to be reported on, it needs to be registered with Inland Revenue. You can only do this on behalf of the trust if you are a ‘tax agent’ (as per the requirements of Section 34(b) of the Tax Administration Act 1994) for the trust. Otherwise the trust will need to register directly with Inland Revenue.

Registration is, in turn, a pre-requisite to being able to physically report the prescribed information (about their reportable accounts) to Inland Revenue. Both CRS registration and reporting are conducted via myIR.

Reporting – Corporate trustees

In order for a corporate trustee to report on behalf of a trust:

  • CRS (and FATCA) registration requires an IRD number for each trust with reportable accounts;
  • Each trust with reportable accounts is required to have their own individual myIR system access (this allows the trust to delegate myIR access to the corporate trustee for reporting); and
  • An existing Foreign Trust Registration Number is not a substitute for an IRD number, because it will not allow you to access the myIR portal (refer Non-resident offshore business IRD number application IR744).

Please note: In myIR a disclosure is submitted by the corporate trustee and the information is recorded against a trust’s IRD number in the IRD’s system. The corporate trustee also requires an IRD number and their own myIR access so a trust can ‘delegate’ myIR system access to the corporate trustee – to report on the trust’s behalf. Alternatively the corporate trustee is able to ‘request’ reporting access in myIR, from a trust.

Further details are in the CRS user guide available from CRS registration and reporting.

CRS: Account freezing and closure

There are significant implications for account holders if a financial institution is not able to obtain a valid CRS self-certification from them (ie, about whether the account holder or controlling person is a relevant foreign tax resident).

Law firms may be asked to assist in providing relevant information if they are connected with such accounts (eg, a law firm may manage a trust account for such an account holder and may be asked by the bank that maintains the account to confirm whether that person is a relevant foreign tax resident).

A financial institution – such as a bank should not open accounts until they have obtained a completed self-certification. The financial institution is then required to “validate” (check the reasonableness of) the self-certification. A financial institution that adopts a “back office” “day two” process to validate self-certifications needs to obtain a valid self-certification within 90 days and in time for the end of the reporting period.

IRD has received a number of queries about what happens if the financial institution is not able to obtain a valid self-certification (ie, on “day 91”). In order to hold a financial account in New Zealand, account holders (and other persons connected with the account – such as controlling persons) are required by law to comply with all CRS obligations, including self-certification requests. If they do not comply with all of their CRS obligations then the financial institution may not open an account for them, or may freeze and/or close the account.


  • If an account holder intends to open a new account and does not provide the relevant information, the financial institution must not open the account.
  • If the financial institution does open an account (ie, because it has obtained a completed self-certification) then it is legally required to also check whether the account information provided is correct. As part of this process an account holder may be asked to provide additional information and/or documentation.
  • If the account holder does not respond correctly and completely to requests for information then the financial institution might freeze and/or close the account.

To reinforce these points Inland Revenue has updated its account holder brochures for both the CRS and FATCA available from: and

Joanne Poole is Senior Project Manager, Michael Webb is Principal Advisor AEOI & FATCA and Jacqui Thompson is AEOI Change Lead at Inland Revenue.

Lawyer Listing for Bots