From 1 July 2014 Bankwest, as a division of the Commonwealth Bank Group (the CBA Group), was required by law to identify and report certain account information to the Australian tax office (ATO). This obligation stemmed from changes to the Taxation Administration 1953 (Cth) in response to the United States’ Foreign Account Tax Compliance Act (FATCA) and the agreement between Australian and the United States to collect and report information of US tax residents/ citizens who pay tax, to the Australian Tax Office. Under FATCA we are required to determine whether accounts are reportable by asking individual and business customers about their foreign tax status.
Additional obligations under the Taxation Administration Act 1953 in response to the Common Reporting Standard (CRS), come into effect on 1 July 2017. CRS determines how Financial Institutions are to collect and report financial account information (tax information) of foreign tax residents to the Australian Tax Office (ATO). This means that Bankwest and other financial institutions will now need to report to the ATO any depository accounts held by individual and business customers who are foreign tax residents. The ATO will then exchange this information with the relevant country’s tax authority.
This obligation requires that financial institutions ask all customers additional questions regarding their tax residency at the time of opening an account.
- New laws require us to determine tax residency for all customers opening depository accounts
- The CBA Group will need to report certain account information depending on tax residency to the Australian Tax Office (ATO).