CRS/FATCA Step by step

Declarants are:

• enterprises that receive deposits as part of ordinary banking activity or other similar business. Enterprises that grant credit and allow the customer to pay in an amount exceeding the outstanding amount, without this amount being immediately returned to the customer, are considered to receive deposits.
• enterprises that hold or manage financial instruments and other financial products on behalf of others as a part of their business. Securities held in a central securities depository are considered to be managed by the account operator.
• insurance companies and others that issue or are obligated to make payments under an insurance agreement with a surrender value, or to make payments under a pension agreement, an annuity contract, or another contract when the time frame for payment is fully or partly determined with reference to the anticipated life expectancy of one or more natural persons.
• enterprises that have received more than 50 per cent of their gross income over the past three financial years from one or more of the following activities or operations, exercised in business activities for or on behalf of a customer:
  • trading in money market instruments (cheques, bills, certificates of deposit, derivatives, etc.), foreign exchange, exchange, interest rate and index instruments, transferable securities or commodity futures trading,
  • individual and collective portfolio management, or
  • otherwise investing, administering, or managing financial instruments and other financial products or money on behalf of other persons
• entities with income from investing, reinvesting or trading in financial instruments and other financial products, which are governed, administered or otherwise managed by an entity referred to above.
• If an enterprise carries out activity described above, further consideration must be given to whether the enterprise is covered.

Some enterprises are entirely or partially exempt from the reporting obligation which implements CRS/FATCA, even though the enterprise is considered a financial institution.

In brief, the exemptions concern:

• the Norwegian State, government bodies and wholly owned enterprises
• Norges Bank and subsidiaries
• international organisations (Intergovernmental and supranational organisations)
• pension funds, depository pension enterprises and private pension funds established before 1968
• credit card issuers that only have credit cards with deposit limits
• non-profit organisations (partial exemption)
• local credit unions (partial exemption)
• local banks (partial exemption)
• financial institutions which manage low value accounts (partial exemption)
• small financial institutions with a local client base (partial exemption)
• mutual fund and alternative investment funds (partial exemption)

If an enterprise may be covered by the exemptions described above, further consideration must be given to whether the enterprise is covered. You will find more information on which enterprises are covered by the reporting obligation in the guidance.

Financial institutions must register with the US tax authorities in order to be allocated a Global Intermediary Identification Number (GIIN). GIIN is obligatory in connection with the submission of FATCA information to the Norwegian Tax Administration.

Companies etc. that are not covered by the reporting obligation or that are exempt should not be registered.

Declarants that act as "sponsors" for other entities must be registered as a "sponsoring entity", while the other entities must be registered as a "sponsored entity".

We recommend that declarants register well before the deadline for the submission of information to the Norwegian Tax Administration, as the registration process can take a while.

Registration must take place in accordance with the applicable guidelines from the US tax authorities, which can be found at www.irs.gov/fatca

Any questions linked to registration must be addressed to the US tax authorities.

The reporting obligation which implements CRS and FATCA covers:

• deposit accounts
• financial instruments and other financial products held in accounts
• units in mutual funds
• debt and equity interests in alternative investment funds
• debt and equity interests in other professionally managed companies, etc.
• annuities
• cash value insurance schemes

You will find more information on which products are covered by the reporting obligation in the guidance.

The reporting obligation which implements CRS and FATCA does not cover:

• property savings accounts for young people (BSU)
• tax-favourable pension schemes (IPS/IPA)
• credit card accounts with depository limits
• accounts in the name of a deceased person
• escrow accounts
• inactive depository accounts
• certain units in trusts (partial exemption)
• collective annuities (partial exemption)

You will find more information on which products are exempt from the reporting obligation in the guidance.

An examination must be carried out to determine where account holders and beneficial owners are taxable. If an account holder is tax resident in another country, the foreign identification number must also be obtained.

Account holder is a natural person:

• Is the account holder resident in another country for tax purposes?
• Is the account holder a US citizen?

Account holder is a company, etc.:

• Is the account holder domiciled in another country for tax purposes?
• Is the account holder exempt because the company's shares are regularly traded via an established securities market, foreign government entity, financial institution, etc.?
• Is the account holder a non-participating financial institution as defined in FATCA?

Beneficial owners:

• Beneficial owners are natural persons who, as the last instance, own or control a company and who have been identified in accordance with the Money Laundering Act.
• An examination should be carried out to determine where beneficial owners are tax resident when the company, etc. which is the account holder primarily has passive income/assets?
• Is the account holder resident in another country for tax purposes?
• Is the account holder a US citizen?

It will generally be necessary to obtain self-certification concerning where the account holder/beneficial owner is liable to pay tax in connection with the setting up of new accounts. For existing accounts, an investigation must be carried out to determine customer information which is linked to existing accounts in order to determine where the account holder/beneficial owner is liable to pay tax. Changes and new information must be followed up. You will find more information about how these investigations should be carried out in the guidance notes.

The information that is reported on the basis of CRS and FATCA must include:

• the declarant's name, address, organisation number and Global Intermediary Identification Number (GIIN)
• the account holder’s/beneficial owner's name, address with country code, Norwegian ID/D number or organisation number, foreign country code and foreign identification number
• account information, such as account number and type, country code and the account's balance or value as of the end of the income year
• return in the form of interest, dividends, etc.
• gross proceeds

Information concerning where account holders are tax resident, as well as foreign ID numbers, must be submitted as from the income year in which a self-certification statement is obtained or customer information linked to existing accounts is examined.

Declarants must submit CRS/FATCA information via these schemes:

• Deposits, loans and interest
• Financial products
• Life insurance
• Mutual funds
• Securities account
• Share savings account
• International reporting CRS/FATCA

You will find more information on how to submit information here.

Please note that the deadlines apply to the individual schemes.