The Common Reporting Standard (CRS) is a process for the international exchange of tax information aimed at preventing tax evasion. More than 100 countries participate in the process, including the Federal Republic of Germany. The Federal Central Tax Office (BZSt) oversees the process in Germany.
The CRS requires financial institutions in Germany—such as banks and insurance companies—to report information about their customers’ reportable financial accounts to the Federal Central Tax Office (BZSt). If accounts have a reportable connection to a foreign country, the BZSt exchanges this data with CRS partner countries and, in return, receives information from those partner countries regarding accounts held abroad by individuals resident in Germany.
The CRS also establishes due diligence requirements that financial institutions must fulfill to identify reportable accounts. This includes obtaining self-disclosure forms from new customers (individuals and legal entities) when opening an account. The self-disclosure statement contains information about the account holder’s tax residency.
The self-disclosure form must be obtained by the responsible financial institution and submitted to the BZSt no later than 90 days after the account is opened. If it is not available by that time, the absence of the self-disclosure form must be reported to the BZSt. The report can be submitted online or by mail.