FATCA and CRS Tax Guide

FATCA and CRS Tax Guide | Bestar

FATCA and CRS Tax Guide

That's a very broad but important topic! The Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) are international frameworks designed to combat tax evasion by promoting the automatic exchange of financial account information.

Here is a guide to the key features, differences, and reporting requirements of FATCA and CRS:

Overview of FATCA and CRS

Both FATCA and CRS require Financial Institutions (FIs) worldwide to identify their account holders' tax residencies and report specific financial account information to their local tax authorities, which is then automatically exchanged with other jurisdictions.

Feature	FATCA (Foreign Account Tax Compliance Act)	CRS (Common Reporting Standard)
Origin	U.S. Law (Internal Revenue Service - IRS)	Global initiative (Organisation for Economic Co-operation and Development - OECD)
Primary Goal	Combat offshore tax evasion by U.S. persons.	Combat offshore tax evasion by tax residents of all participating jurisdictions.
Scope	Bilateral agreements (Intergovernmental Agreements - IGAs) between the U.S. and partner jurisdictions (e.g., Singapore)	Multilateral agreement involving over 100 jurisdictions (excluding the U.S.)
Who is Reportable?	U.S. persons (citizens, residents, and certain entities with substantial U.S. ownership).	Tax residents of all CRS-participating jurisdictions (excluding the FI's jurisdiction).
Withholding	Imposes a severe 30% withholding tax on certain U.S.-sourced payments for non-compliant FIs.	No withholding tax requirement; compliance is enforced by local jurisdictional penalties.
Registration	Financial Institutions must register with the IRS to obtain a Global Intermediary Identification Number (GIIN).	No central registration (like a GIIN) is required.
Reporting Thresholds	Generally includes a de minimis threshold (e.g., accounts under $50,000 may be excluded from due diligence/reporting for pre-existing individual accounts).	Generally, no de minimis threshold applies for individual accounts (all are in scope). A $250,000 threshold may apply to pre-existing entity accounts.

Reporting Obligations for Financial Institutions (FIs)

FIs (such as banks, insurers, trust companies, and fund managers) in participating jurisdictions must follow these steps:

1. Due Diligence & Identification:

   
   

   • New Accounts: Obtain a Self-Certification Form from all new clients to determine their country(ies) of tax residency and Taxpayer Identification Number(s) (TINs).

   • Pre-existing Accounts: Review records to identify indicators of reportable tax residency.

     
     

2. Classification: Classify the account holder and, for certain entities (like Passive Non-Financial Entities or NFEs), identify and collect information on their Controlling Persons.

   
   

3. Reporting: Annually file a report with the local tax authority (e.g., IRAS in Singapore) containing the required information for all identified reportable accounts.

Information Required on the Self-Certification Form

The declaration you provide to your bank or FI typically includes:

• Full legal name

• Current residential address

• Date and place of birth

• Country(ies) of tax residence

• Taxpayer Identification Number(s) (TINs) for each tax residency

• Account details

Impact on Individuals and Entities

1. Determining Your Tax Residency

Your tax residency is the key factor in determining if your financial account is reportable.

• Tax Residency: This is generally the country where you are treated as a resident for tax purposes. Rules vary by country but often depend on factors like physical presence, place of abode, and employment.

  
  

• Multiple Residencies: It is possible to be a tax resident of more than one country. If so, you must declare all of them.

2. FATCA Impact (U.S. Persons)

If you are a U.S. person (U.S. citizen, Green Card holder, or resident), your accounts with Foreign Financial Institutions (FFIs) are reportable to the IRS (via your local tax authority).

3. CRS Impact (Non-U.S. Tax Residents)

If you are a tax resident of a CRS-participating jurisdiction and hold an account in another participating jurisdiction, your account information will be reported to your country of tax residency.

Compliance and Penalties

• For Individuals/Entities: Failure to provide the required Self-Certification or providing incorrect information may result in the FI being unable to open or maintain your account.

  
  

• For Financial Institutions (FIs): Non-compliance can result in substantial penalties from the local tax authority. Under FATCA, non-compliant FIs are also subject to a 30% withholding tax on certain U.S.-sourced payments.

Since the specific rules, deadlines, and penalty structures can vary by jurisdiction, it is crucial to consult the official guidance provided by the local tax authority (like the IRS for FATCA, or your local tax body for CRS) or seek advice from a qualified tax professional.

Latest Official Guides on FATCA and CRS from Singapore's Tax Authority

The Inland Revenue Authority of Singapore (IRAS) publishes its official guidance on FATCA and CRS under its e-Tax Guide series.

Here are the latest editions of the official guides for the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA):

1. Common Reporting Standard (CRS)

The most recent comprehensive guide is the Fourth Edition, published in late 2025.

Official Guide	Edition	Publication Date
Common Reporting Standard (CRS) e-Tax Guide	Fourth Edition	October 31, 2025

Key Recent Updates

Recent updates have focused on aligning Singapore's rules with the latest OECD international commentary:

• Financial Institution (FI) Residency: The rules for determining whether an FI (particularly trust structures) is considered a resident in Singapore for CRS purposes have been clarified to align with the OECD CRS Commentary.

  
  

• Investment Entities: The definition of an Investment Entity has been updated to align with the latest CRS Regulations, which may broaden reporting obligations for some entities previously classified as Non-Financial Entities (NFEs).

  
  

• TIN Reporting: Clarification that references to Tax Identification Numbers (TINs) in the reporting requirements also include their functional equivalents in jurisdictions that do not issue a TIN.

2. Foreign Account Tax Compliance Act (FATCA)

The latest primary guide governing the compliance requirements under the Singapore-US Intergovernmental Agreement (IGA) remains the Fourth Edition, published in 2021.

Official Guide	Edition	Publication Date
Compliance Requirements of the Singapore-US Intergovernmental Agreement on FATCA e-Tax Guide	Fourth Edition	December 1, 2021

Most Recent FATCA Document Updates

While the main e-Tax Guide is from 2021, supplementary guidance documents are updated more frequently to reflect changes in filing procedures and validation rules. The most recent updates include:

• FATCA File and Record Level Validations: The document detailing the validation rules for FATCA XML file submissions was updated in October 2024 to add and remove specific error codes.

  
  

• Filing Deadline: Reporting Singaporean Financial Institutions (SGFIs) are required to submit their FATCA returns annually to IRAS by May 31 of the year following the calendar year to which the return relates.

Mastering FATCA & CRS Compliance: How Bestar Singapore Simplifies AEOI for Your Business

Navigating the complexities of global tax transparency, specifically the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS), is mandatory for most financial entities in Singapore. Failure to comply with these Automatic Exchange of Information (AEOI) standards results in severe penalties, including a 30% withholding tax under FATCA.

Bestar Singapore stands as a trusted partner, specializing in transforming this complex regulatory obligation into a streamlined, risk-managed process. Here is your essential guide to how Bestar can provide end-to-end FATCA CRS compliance services in Singapore.

Why Choose Bestar for FATCA & CRS Compliance in Singapore?

Bestar’s expertise goes beyond routine tax filing. Their team of tax specialists and corporate secretarial experts provides integrated solutions, ensuring full alignment with the Inland Revenue Authority of Singapore (IRAS) and international OECD standards.

By leveraging a multidisciplinary team, Bestar addresses the entire compliance lifecycle, from initial entity classification to final annual reporting.

Key Service Areas: How Bestar Singapore Helps with AEOI

Bestar provides targeted support across the three critical phases of AEOI compliance: Advisory, Due Diligence, and Reporting.

1. Strategic AEOI Advisory & Entity Classification

Before any reporting can occur, your entity must be correctly classified under both the CRS and FATCA regulations. Misclassification is the most common pitfall.

• Legal Entity Classification Analysis: Bestar reviews your corporate structure (including Trusts, Funds, and Holding Companies) to accurately determine if you are a Reporting Financial Institution (FI), a Non-Financial Entity (NFE), a Passive NFE, or a specific Exempt Entity.

  
  

• FATCA & CRS Registration: If classified as a Reporting FI, Bestar manages the necessary registration process with the IRAS for CRS, and assists with the IRS registration to obtain a Global Intermediary Identification Number (GIIN) for FATCA.

  
  

• Policy Development: Drafting and implementing comprehensive FATCA and CRS policies and procedures to embed compliance controls into your firm's operational workflow.

2. Enhanced Due Diligence and Account Remediation

The cornerstone of compliance is thorough due diligence—identifying who the ultimate tax residents are. Bestar streamlines this process, particularly for sophisticated structures.

• Tax Residency Due Diligence: Systematic review of new and pre-existing client accounts and documentation (e.g., Self-Certification Forms) to identify indicia of U.S. person status (FATCA) or tax residency in CRS partner jurisdictions.

  
  

• Controlling Person Identification: For Passive Non-Financial Entities (PNFEs), Bestar meticulously identifies the Controlling Persons and determines their tax residency status, a complex but mandatory CRS requirement.

  
  

• AML/KYC Integration: Leveraging their expertise in Anti-Money Laundering (AML) and Customer Due Diligence (CDD) remediation, Bestar ensures your AEOI processes are fully integrated with your existing KYC framework, saving time and reducing duplication of effort.

3. Annual FATCA and CRS Reporting Services

Bestar takes the burden of preparing and submitting the annual electronic returns, ensuring they are accurate, timely, and in the correct XML format required by IRAS.

• Data Aggregation and Validation: Compiling and consolidating all required account information (account balance, gross payments, TINs, and names) from your various systems.

  
  

• XML File Generation: Preparing the final FATCA and CRS XML files in the prescribed format for seamless electronic submission to the IRAS.

  
  

• Timely Submission: Filing the annual returns (including Nil Returns, where applicable) with IRAS by the mandated deadlines (e.g., May 31st for FATCA).

  
  

• Error Management: Providing support in managing and resolving any errors flagged by IRAS’s validation systems post-submission.

Specialized Support for Financial Entities

Bestar Singapore is uniquely positioned to assist entities operating in the regulated financial sector:

• Single Family Offices (SFOs): Assisting in the classification of the SFO vehicle and managing the AEOI obligations related to the family principals and underlying investment entities.

  
  

• Fund Management Companies (FMCs): Ensuring the funds under management are correctly classified (e.g., Investment Entity vs. NFE) and that robust investor onboarding and reporting procedures are in place to meet MAS and AEOI requirements.

  
  

• Trusts: Providing specialised advice on complex trust structures, including the reporting obligations of trustees and the identification of reportable beneficiaries.

Ready to Simplify Your Compliance Journey?

Don't let the complexity of global tax reporting expose your entity to compliance risk. Partner with a dedicated advisor who understands the local regulatory landscape and the global AEOI standards.

Contact Bestar Singapore today for a consultation on safeguarding your FATCA and CRS compliance.