The International Tax Compliance Regulations 2015

These Regulations may be cited as the International Tax Compliance Regulations 2015 and come into force on 15th April 2015.

These Regulations have effect for and in connection with the implementation of obligations arising under the agreements and arrangements listed in paragraph (3) and apply separately in relation to each of those agreements or arrangements except where the context otherwise requires.

The agreements and arrangements are—

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

These Regulations have effect from—

In these Regulations, a reference to “relevant agreement” means such agreement or arrangement referred to in paragraph (3) as the context requires, as that agreement or arrangement has effect from time to time.

For the purposes of these Regulations—

Any expression which is defined in a relevant agreement but not in section F8... 235 of FA 2013 or in these Regulations has the same meaning in these Regulations as in the relevant agreement.

In its application for the purpose of these Regulations, the CRS is to be read as if—

In these Regulations, a “reportable account” means—

But—

An election under paragraph (2)(c) must be made for each calendar year for which the election is to have effect in the return required by regulation 6 for that year.

The reporting financial institution must apply the account balance aggregation and currency rules in the relevant agreement for the purposes of determining whether an account maintained by the institution is within paragraph (1)(b) or (c).

The account balance aggregation and currency rules are—

In applying the account balance aggregation and currency rules for the purposes of a relevant agreement and these Regulations, an account balance that has a negative value is treated as having a nil value.

In determining the balance or value of an account denominated in a currency other than US dollars for the purposes of a relevant agreement and for the purposes of paragraph (1)(b) or (c), the institution must translate the relevant dollar threshold amounts into the other currency by reference to the spot rate of exchange on the date for which the institution is determining the threshold amounts.

For the purposes of a relevant agreement and these Regulations, an account held by an individual as a partner of a partnership is treated as an entity account and is not treated as an individual account.

An account is a dormant account if—

A reporting financial institution must establish and maintain arrangements that are designed to identify in respect of a financial account—

A reporting financial institution must comply with paragraph (1) by applying the due diligence procedures set out in the relevant agreement.

A reporting financial institution must keep a record of—

A reporting financial institution must keep the records required by paragraph (2A) for a period of—

The due diligence procedures are—

F6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Where a provision of the CRS does not specify a deadline for the requirements of that provision to be satisfied F8that deadline is—

In applying the due diligence procedures, accounts within F12regulation 2(1)(b), (ba) and (c) in respect of which no election under regulation 2(2)(c) has been made are treated as new accounts or pre-existing accounts as the case may be.

apply the due diligence procedures for new accounts to pre-existing accounts, and

apply the due diligence procedures for high value accounts to low value accounts.

A reporting financial institution under the FATCA agreement may modify the due diligence requirements as follows.

In the case of an account within paragraph II.B or II.C of Annex I to the FATCA agreement, the due diligence requirements do not include the requirement to carry out the electronic search described in paragraph II.B (1) of that Annex if—

In the case of an account with paragraph II.D or II.E of Annex I to the FATCA agreement, the due diligence requirements do not include the requirement to carry out the electronic searches described in paragraph II.B (1) or II.D (1) of that Annex or the requirement to carry out the paper record search described in paragraph II.D (2) of that Annex if—

The reporting financial institution may rely on evidence that a person is a specified U.S. person obtained in relation to another financial account if the due diligence procedures in the relevant U.S. Treasury Regulations would allow such reliance.

For the purposes of this regulation references to the documentary evidence set out in paragraph VI.D of Annex I of the FATCA agreement are to be treated as if the words “other than a Form W-8 or W-9” were omitted.

A reporting financial institution must, in respect of the first reporting year and every following calendar year, make a return setting out the information required to be reported under the relevant agreement in relation to—

The first reporting year is—

The information required to be reported is—

The return must be submitted electronically in accordance with regulation 7 on or before 31stMay of the year following the calendar year to which the return relates.

For the purposes of the information required to be reported under the relevant agreement—

The return must be made electronically using an electronic return system.

The form and manner of an electronic return system is specified in specific or general directions given by the Commissioners for Her Majesty's Revenue and Customs.

A return which is made otherwise than in accordance with paragraphs (1) and (2) is treated as not having been made.

An electronic return system must incorporate an electronic validation process.

Unless the contrary is proved—

A return made behalf of a reporting financial institution is taken to have been made by that institution, unless the institution proves that the return was made without the institution's authority.

Where a reporting financial institution elects to report the gross proceeds from the sale or redemption of a financial asset which are reported by the reporting financial institution under the OECD Crypto-Asset Reporting Framework in accordance with Section 1G of the CRS, such election must be made by notice to HMRC.

Notice under paragraph (1) must be given on or before 31st May following the end of the calendar year to which it relates.

A notice given under paragraph (1) has effect for the calendar year to which it relates, and for all subsequent calendar years until it is withdrawn, including the calendar year in which it is withdrawn.

The form and manner in which a notice under paragraph (1) is to be given and withdrawn is specified in specific or general directions given by the Commissioners for HMRC under this regulation.

In relation to an account identified as a reportable account for the purposes of the FATCA agreement, the information required to be reported is modified as follows.

In the case of all reportable accounts for the calendar year 2014, the information required to be reported is provided in Article 3(3)(a)(1) of the FATCA agreement.

In the case of custodial accounts for the calendar year 2015, the information required to be reported is provided in Article 3(3)(a)(2) of the FATCA agreement.

In the case of pre-existing accounts—

In relation to a reporting financial institution under the FATCA agreement, the due diligence requirements and the information required to be reported are modified as follows in relation to payments to a non-participating financial institution.

A reporting financial institution must establish and maintain arrangements that are designed to identify payments made by the institution to a non-participating financial institution in the calendar year 2015 or 2016,

“Payment” here does not include consideration given by the reporting financial institution for the provision of goods or services to it.

A reporting financial institution must apply the due diligence procedures set out in paragraph IV.D (3) of Annex I of the FATCA agreement to identify whether a financial institution is a non-participating financial institution.

In respect of any case in the calendar years 2015 and 2016 when a reporting financial institution is within the terms of sub-paragraph 1(e) of Article 4 of the FATCA agreement, the institution must make a disclosure of information in accordance with the requirements of that sub-paragraph.

A reporting financial institution must in respect of each of the calendar years 2015 and 2016 prepare a return setting out the information set out in Article 4(1)(b) of the FATCA agreement.

The return must be submitted electronically in accordance with regulation 7 on or before 31stMay of the year following the calendar year to which the return relates.

For the purposes of this regulation, “non-participating financial institution” includes anyone who is treated as a non-participating financial institution as a result of sub-paragraph 5(a) of Article 4 of the FATCA agreement.

A reporting financial institution must notify each individual reportable person or individual specified U.S. person that information relating to that person which is required to be reported under regulation 6 will be reported to HMRC and may be transferred to the government of another territory in accordance with a relevant agreement.

The notification must be made by 31st January in the calendar year following the first year in which the account held by the individual is a reportable account maintained by the reporting financial institution.

A reporting financial institution and a specified non-reporting financial institution must register with HMRC on or before the later of—

Registration must be effected by the giving of notice to HMRC.

A notice under paragraph (2) must contain the information, and be given in the form and manner, specified in specific or general directions given by the Commissioners for HMRC under this regulation.

If a reporting financial institution is not resident in the United Kingdom, the obligations of the institution under these Regulations are to be treated as if they were also the obligations of any UK representative of the institution.

“UK representative” has the same meaning as it has in—

For the purposes of this regulation—

In order to determine whether or not the obligations arising under these Regulations have been complied with, an officer of Revenue and Customs may require a F2financial institution or UK representative to provide such information as the officer reasonably requires as specified by written notice.

The information required by notice under paragraph (1) must be provided—

as is reasonably required by the officer of Revenue and Customs.

in the case of a self-certification under the CRS, in accordance with the requirements of Sections III to VI and the commentary on those sections, and

in the case of a self-certification under the FATCA agreement, in accordance with the requirements of Annex 1 to that agreement.

Where in F2these regulations—

In paragraph (1), “liable person” means, in relation to—

In this regulation “collective investment scheme” means—

Subject to paragraph (2), if a reporting financial institution or UK representative fails to comply with regulation 3 (due diligence requirements), the reporting financial institution or UK representative is liable to a penalty not exceeding £100 for each account holder or controlling person in respect of which the reporting financial institution or UK representative fails to apply the due diligence procedures in regulation 3(3)(b) or 3(3)(c).

Where the failure in question is a failure to obtain a valid self-certification required by the CRS or the FATCA agreement, the reporting financial institution is liable to a penalty not exceeding £300 for each account holder or controlling person in respect of which the reporting financial institution or UK representative fails to apply the due diligence procedures in regulation 3(3)(b) or 3(3)(c).

If a reporting financial institution or UK representative fails to comply with regulation 3(2A) or 3(2B) (record-keeping), the reporting financial institution or UK representative is liable to a penalty not exceeding £5,000 for each reportable period in respect of which one or more failures have occurred.

A failure has occurred in respect of a reportable period if the failure pertains to records which relate to that reportable period for the purposes of regulation 3(1), 3(2) or 3(3).

to a penalty not exceeding £5,000, and

if the failure continues after notice of an assessment of a penalty under paragraph (a) is issued, to a penalty or penalties not exceeding £600 for each subsequent day on which the failure continues.

the inaccuracy or incompleteness is deliberate,

the inaccuracy or incompleteness is due to a failure to take reasonable care, or

the reporting financial institution or UK representative discovers the inaccuracy or incompleteness some time later and fails to take reasonable steps to inform HMRC.

to a penalty not exceeding £100 for each reportable person in respect of which one or more failures have occurred, and

if any of the failures continue after notice of an assessment of a penalty under paragraph (a) is issued, to a penalty or penalties not exceeding £100 for each subsequent day on which any of the failures continue.

to a penalty not exceeding £1,000, and

if the failure continues after notice of an assessment of a penalty under paragraph (a) is issued, to a penalty or penalties not exceeding £300 for each subsequent day on which the failure occurs.

to a penalty not exceeding £5,000, and

if the failure continues after notice of an assessment of a penalty under paragraph (a) is issued, to a penalty or penalties not exceeding £600 for each subsequent day on which the failure occurs.

where the failure is deliberate, or

where the failure is due to a failure to take reasonable care.

Liability to a penalty under regulations 22A to 22H does not arise if the person liable to the penalty satisfies an Officer of Revenue and Customs or, on an appeal notified to the tribunal, the tribunal that there is a reasonable excuse for a failure to do anything required to be done under the applicable regulation.

For the purposes of this regulation, neither of the following is a reasonable excuse—

If a person had a reasonable excuse for a failure but the excuse has ceased, the person is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.

A reporting financial institution or UK representative cannot be liable to penalties under any two or more of regulations 22A (failure to comply with due diligence procedures), 22B (failure to comply with record-keeping requirements), and 22D (inaccurate or incomplete reports) in respect of the same act or omission.

Where, apart from paragraph (1), a reporting financial institution or UK representative would be so liable, the reporting financial institution or UK representative is liable to a penalty in respect of that act or omission under whichever of regulations 22A, 22B and 22D is, in the opinion of an officer of Revenue and Customs, correct or appropriate in the circumstances.

An officer of Revenue and Customs may make an assessment imposing a penalty under any of regulations 22A to 22H and setting it at such amount as, in the opinion of the officer, is appropriate.

Notice of an assessment of a penalty under this regulation must—

Subject to paragraph (4), after a notice of assessment of a penalty under this regulation has been given, the assessment must not be altered except on appeal.

If it is discovered by an officer of Revenue and Customs that the amount of a penalty under regulation 22C(b), 22E(b), 22F(b) or 22G(b) which has been assessed under this regulation is or has become insufficient, the officer may make an assessment in a further amount so that the penalty is set at the amount which, in the opinion of that officer, is appropriate.

An assessment of a penalty under regulation 22B, 22C, 22E, 22F or 22G must be made within the period of 12 months beginning with the date on which the person became liable to the penalty.

An assessment of a penalty under regulation 22A, 22D or 22H must be made—

A penalty assessed under regulation 22K is due and payable at the end of the period of 30 days beginning with the day on which the notice of assessment is issued.

A penalty assessed under regulation 22K is to be treated for all purposes as if it were tax charged in an assessment and due and payable.

on the grounds that liability to a penalty under any of regulations 22A to 22H does not arise, or

as to the amount of a penalty assessed under any of regulations 22A to 22H.

Notice of an appeal under regulation 22M must—

Subject to paragraph (3), the provisions of Part 5 of the Taxes Management Act 1970 relating to appeals have effect in relation to an appeal against an assessment under regulation 22M as they have effect in relation to an appeal against an assessment to income tax.

On an appeal under regulation 22M that is notified to the tribunal, the tribunal may—

F1a F2... person enters into any arrangements, and

the main purpose, or one of the main purposes, of F3... entering into the arrangements is to avoid any obligation under these Regulations,

In these Regulations—

• “the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs,

• F1“specified non-reporting financial institution” means a non-reporting financial institution which is a trust within the meaning of Section VIII(B)(1)(e) of the CRS or paragraph II(D) of Annex II to the FATCA agreement,

• “the tribunal” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal,

• “US Treasury Regulations” mean the US Regulations Relating to Information Reporting by Foreign Financial Institutions and Other Foreign Entities M1.

The following table lists the places where expressions that apply for the purposes of these Regulations are defined or otherwise explained—

In respect of the accounts listed in paragraph (4)—

The accounts are—