Help & Support
CRS and FATCA requirements for Client Fund Service account holders
As part of global measures to counter tax evasion, all New Zealand banks and financial institutions are required to collect information about customers’ foreign tax residency and pass that and other personal and account information onto Inland Revenue, which may then be exchanged with overseas tax authorities.
The obligation for New Zealand banks to collect this information arises under the Common Reporting Standard (CRS), initiated by the Organisation for Economic Co-Operation and Development (OECD). The obligations to provide information also extend to the US Foreign Account Tax Compliance Act (FATCA). Obligations under both these regimes have been incorporated into New Zealand tax law.
The requirement to capture this information impacts you, if you have deposited funds on your client’s behalf into an interest-bearing deposit account through the Client Fund Service (CFS) product. You or your client may also be subject to Inland Revenue penalties PDF 118KB if you fail to provide this information, or provide false or misleading information.
To comply with the global tax reporting obligations under CRS and FATCA, the CFS Trustee must complete certain customer due diligence before opening a new CFS account and for any change in circumstance.
The CFS Trustee must submit a monthly BNZ Client Tax Residency reporting spreadsheet to the BNZ Global Tax Compliance team. This spreadsheet template contains details of all new client accounts opened for the preceding calendar month (as well as any changes in circumstance to existing accounts, if applicable). Based on the information provided to us; we will submit the necessary customer and account information to Inland Revenue annually.
In addition to the above, every six months BNZ will also request CFS Trustees to sign and return a CFS Attestation within 30 days of receiving it.
Process for opening a new CFS client account
- Confirm your client’s tax residency and FATCA status.
Note: If a client has previously provided a valid FATCA self certificate and CRS self-certification (that has passed the Reasonableness Test PDF 364KB), and opens subsequent accounts, they are not required to provide a new form unless there has been a change in circumstance or we advise you otherwise.
- Individual client account
Obtain a completed and signed Individual Tax Residency Self-Certification PDF 61KB from your client before depositing your client’s funds into the account.
- Entity client account
- Obtain a completed and signed FATCA Entity Certificate PDF 92KB and CRS Entity Self-Certification PDF 95KB for any client prior to depositing your client’s funds into the account.
- Obtain Controlling Person information if your client is the following:
- Under CRS, has the entity classification of ‘Passive NFE’ or a foreign ‘FI – Managed Investment Entity’. Obtain a completed and signed Controlling Person Tax Residency Self-Certification PDF 93KB from each Controlling Person.
- Under FATCA, the Entity has Beneficial Owners/Controlling Persons who are US citizens or US residents for tax purposes. Obtain all US controlling person information under ‘Details of any US Beneficial Owners /Controlling Persons’ within the FATCA Entity Certificate PDF 96KB.
- Individual client account
- Complete the box on the bottom right of the forms ‘CFS Customer to Complete’. For reconciliation purposes, please provide details of your client’s CFS account number.
- Complete a ‘Reasonableness Test’ PDF 364KB for any CRS self-certification obtained before opening and depositing funds into the client account through the CFS product.
- Retain the self-certificates and reasonableness test information as evidence of compliance should we call upon it in the future.
- At the start of each month, add the new client account/s opened in the previous month to your Client Tax Residency spreadsheet.
- Complete the relevant columns on the Client Tax Residency spreadsheet.
- Email the completed spreadsheet on the first business day of the month to email@example.com with the email subject line ‘CFS Client – Info’.
- We will review the Client Tax Residency spreadsheet and advise an outcome, either:
- Trustee’s completed template is accepted and stored for annual IRD reporting
- Alternatively, we identify errors in the template and respond to Trustee seeking correction and resubmission.
You do not need to send a monthly spreadsheet to us if:
- you have not opened any new client accounts since your last monthly submission; and
- there have been no changes in circumstances for your submitted client accounts; and
- there are no outstanding queries from your previous submissions to us.
Help & Support:
For help completing the spreadsheet and for information on file naming conventions, please follow the instructions outlined in the Client Tax Residency Data Capture process PDF 834KB.
A FATCA and/or CRS self-certification is not required if a client account meets the FATCA and/or CRS excluded account criteria. For example, excluded accounts include accounts opened for the purpose of holding funds in escrow or a deceased estate. To determine whether the client account meets the exclusion criteria, please refer to the following documents:
- For FATCA, please refer to the ‘Intergovernmental Agreement with the United States in regard to FATCA’ (Annex II Section V) in FATCA IGA PDF 803KB
- For CRS, please refer to the ‘NZ CRS Applied Standard’ (Section VIII Defined Terms - Part C (No. 17) for the definition of ‘Excluded Account’ in NZ CRS Applied Standard PDF 434KB
You must record the account as excluded in the Client Tax Residency template and provide a reason. No further due diligence is required unless you establish that a change in circumstances has taken place which invalidates the assessment of the client account being an excluded account.
You should be able to support and provide evidence of the exclusion decision if requested to do so by BNZ or the regulator. For example, if asked to provide evidence of a deceased estate excluded account, you will need to send BNZ a copy of the deceased’s grant of probate or death certificate.
For information on how to load excluded accounts in the Client Tax Residency template, see the Client Tax Residency Data Capture process PDF 834KB.
Change in circumstances
If there is a change in circumstances which affects the FATCA self-certificate and/or CRS self-certification provided by your client, or you have reason to believe that the self-certification can no longer be relied on, you must:
- re-validate the original FATCA self-certificate and/or CRS self-certification or;
- obtain a new valid FATCA self-certificate and/or CRS self-certification.
Zero or residual client account balances
There is a reporting threshold for individual client accounts for FATCA. There is no reporting threshold for client accounts for CRS. If a client account is not correctly closed in the online CFS system and retains a zero or nominal balance the client account may continue to be reportable for CRS and FATCA reporting purposes.
When the client account is correctly closed in the online CFS system it will only be reportable in the tax year it was closed and not any future tax years.
If you identify a client account with a zero or residual balance which has an open status in the online CFS system, please close the account within the online CFS system to accurately reflect the correct client account status.
If you don’t provide the client account information
Under the Common Reporting Standard and Foreign Account Tax Compliance Act (FATCA) we are required to collect this information for Inland Revenue. You and your client may be subject to Inland Revenue penalties if you don’t provide this information or if you provide false or misleading information. Additionally, we may close your non-compliant CFS account(s), and you will no longer be able to access these account(s). We may also deactivate your CFS facility.^
Tax Residency Self-Certification:
- Individual Tax Residency Self-Certification PDF 61KB
- Controlling Person Tax Residency Self-Certification PDF 93KB
FATCA Entity Certificate:
CRS Entity Self-Certification:
- Client Tax Residency Data Capture process PDF 834KB
- Reasonableness Test Guide PDF 364KB
- Frequently Asked Questions PDF 659KB
- CRS Guide for Entity Classification and Controlling Person Customer Guide PDF 54KB
In accordance with BNZ’s requirements, you are required to keep copies of all your clients’ FATCA and CRS self-certifications and relevant supporting documents for a period of seven years after your client’s account is closed and provide us with copies if requested.
By opening a client account, you acknowledge that you have collected and verified the required self-certification information, or have evidence that supports your decision for an excluded account, for FATCA and CRS in accordance with the requirements above.
A bi-annual attestation will be sent to the Trustee to sign and return. The attestation confirms your ongoing compliance with:
- the CFS Terms and Conditions; and
- the BNZ Standard Terms; and
- the Trustees’ CRS/FATCA reporting and account opening requirements, as detailed here.
The attestation must be signed by a person with authority to operate the CFS accounts. This attestation is required every six months and must be completed and returned to us within 30 days of receiving it.
Failure to provide a completed attestation will result in closure of your non-compliant CFS account(s), and you will no longer be able to access these account(s). We may also deactivate your CFS facility.^
If your clients are unsure about their foreign tax residency, or have any specific questions regarding foreign tax residency, we recommend they talk to a tax adviser, as we are unable to provide tax advice.
You may also want to visit Inland Revenue’s website and search Common Reporting Standard or FATCA for further information.
For FATCA, a US Tax Identification Number (TIN) is mandatory.
To keep up to date on participating countries and mandatory TINs for CRS, please refer to the OECD Automatic Exchange Portal guidelines.