Investment Funds Update: Common Reporting Standard Effective 1 January 2016

Recent developments with regard to CRS (the OECD’s “Common Reporting Standard”) mean that

Irish funds need to take steps now to update their application forms and subscription documents. As

referred to in Matheson’s November Investment Funds Newsletter, the Irish Finance Bill 2015 contains

further provisions putting in place the necessary legislative framework for the implementation in

Ireland of the CRS, building on measures introduced in the Finance Act 2014. The implementation of

the CRS in Ireland will require Irish investment funds to amend their application forms in order to

obtain certain additional information from investors.

The CRS, which will apply in Ireland from 1 January 2016, is a new global standard on the automatic

exchange of information which is designed to combat tax evasion. More than 90 countries have now

indicated that they will implement CRS reporting in their jurisdiction. It will oblige financial institutions

and investment entities (including investment funds) to report certain information in relation to non-

resident investors to the local tax authorities. This information will then be passed on by the local tax

authorities to the tax authorities of the investors’ country of residence (assuming such countries are

also participating in the CRS scheme). Irish regulations enacting the CRS regime will be implemented

before year end.

As part of the CRS scheme, investors will need to provide additional information to investment funds,

on subscribing for units or shares in the fund. Investment funds will have an obligation to identify and

confirm the tax residence status of all new and existing investors in a reporting Irish fund. The

requirements under the CRS supplement the current obligations to identify and confirm the status of

investors from a US tax perspective under the US Foreign Account Tax Compliance Act (“FATCA”).

The Irish funds industry representative body, Irish Funds, has now published appropriate self-

certification forms incorporating the requirements under both FATCA and CRS for both individuals and

entities. The Irish tax authorities and the Irish Data Protection Commissioner have also provided

guidance on additional details which should be included in fund application forms and subscription

documents.

The Irish tax authorities have advised industry that, in respect of new investors, self-certifications must

be obtained and validated at account opening stage or within 90 days of opening the account at the

latest. In relation to accounts opened prior to 1 January 2016, it is expected that the Irish

implementation regulations will specify the deadline by which the necessary due diligence must be

undertaken.

Consequently, Irish funds must update their application forms and / or subscription documents before

1 January 2016 to reflect the CRS. It is also recommended to update fund prospectuses in due

course to reflect these new CRS issues. We are happy to work with clients to assist with the review

and update of their application forms to meet the CRS requirements.

Please get in touch with your usual Asset Management and Investment Funds or Tax contact or any of

the contacts listed in this publication should you require further information in relation to the

implementation of the CRS.

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Full details of the Asset Management and Investment Funds Group, together with further updates,

articles and briefing notes written by members of the Asset Management and Investment Funds team,

can be accessed at www.matheson.com.

The material is provided for general information purposes only and does not purport to cover every

aspect of the themes and subject matter discussed, nor is it intended to provide, and does not

constitute, legal or any other advice on any particular matter. The information in this document is

provided subject to the Legal Terms and Liability Disclaimer contained on the Matheson website.

Copyright © Matheson

Matheson Publication November 2015

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