Common Reporting Standard

Common Reporting Standard The Common Reporting Standard (CRS) represents a global initiative designed to facilitate the automatic exchange of information regarding financial accounts between countries, aiming to enhance tax compliance and combat tax evasion. Since its introduction in 2017 and 2018, over 100 jurisdictions, including major financial centers like Dubai, Hong Kong, Luxembourg, and Switzerland, have committed to implementing CRS.

In Indonesia, CRS has been in effect since 2018, requiring Indonesian Financial Institutions (IFIs) to comply with the regulations set by the Directorate General of Taxes (DGT). These institutions are obligated to conduct due diligence on all financial accounts under their management and report the account information to the DGT annually, ensuring accuracy and timeliness.

Under Indonesia’s tax legislation, IFIs must develop and maintain systems to collect financial data from their account holders. This data, particularly concerning tax residents of countries with which Indonesia has an information exchange agreement, is then reported to the DGT. The DGT, in turn, shares this information with Indonesia’s exchange partners. The implications for account holders are detailed in the information provided by Financial Institutions to their account holders.