Intercontinental Trust Ltd COMMON REPORTING STANDARD

Intercontinental Trust Ltd COMMON REPORTING STANDARD

1 Conspectus The OECD, working in collaboration with G20 and in close co-operation with the EU, has developed a global standard for automatic exchange of financial account information, also known as the Standard for Automatic Exchange of Financial Account Information ( Standard ) or the Common Standard ( CRS ). The aim of CRS is not only to improve international tax compliance but also to avoid a proliferation of different standards which would increase costs for both governments and financial institutions. Mauritius has signed a Multilateral Competent Authority Agreement ( MCAA ) for automatic exchange of information in Berlin in October 2014. This MCAA is to be read in conjunction with the Standard. As a result, our local Income Tax Act (Act 16 of 1995) was amended to cater for automatic exchange of information S76 (5A) Income Tax Act with effect from 1 st December 2015. Will my information be exchanged? CRS has to a large extent been inspired by the FATCA IGA. However, unlike FATCA, CRS concerns a broader range of entities inasmuch as there are few exempted institutions. More-so, CRS affects only entities, not individual, based on their tax residency. Step 1: Is it an Entity? Yes Step 2: Is the Entity in a Participating Jurisdiction Yes Step 3: Is the Entity a Financial Institution Yes Step 4: Is the Entity a Non- Financial Institution No Financial Institution No No No Yes Non-reporting Non-reporting Non-reporting Non-reporting

2 How does it work? All Financial Institutions ( FI ) (such as banks, insurance, investment entities, Trusts, etc.), tax resident in a participating jurisdiction, shall assess the implication(s) of CRS (if any) on their extant structure and perform such due diligence (as may be required under CRS) on relevant persons (e.g. investors/shareholders/beneficial owners) in view of reporting (where required) financial data (as set forth in CRS) to their local tax authorities (also known as the Competent Authority) which will in turn transmit the financial data received to the country of tax residence of the relevant person being reported, in the event that the latter s country of residence is also a participating jurisdiction. Financial Institutions Review Financial Accounts To identify Reportable Accounts By applying Due Diligence Rules And then Report Relevant Information

3 Framework Once the reporting FIs have submitted their reportable data on their Reportable Accounts to the Competent Authority of that jurisdiction, the latter Competent Authority would transmit each report to the Competent Authority to which such report relates. This is a two-process as illustrated below in contrast with FATCA where reporting was one-sided only. Competent Authority A FI Collects reportable data Reportable Account Exchange Competent Authority B FI Collects reportable data Reportable Account Information to be exchanged Each FI shall report on their Reportable Accounts to their Competent Authority (The MRA for Mauritius). The latter authority shall then exchange the appropriate file to the competent authority of the participating jurisdiction concerned. The information to be reported upon include, but is not limited to: Name of Account Holder Address of Account Holder Country of citizenship of Account Holder Tax residency of Account Holder TAN/TIN/PAN or equivalent of Account Holder Account balance of Account Holder as at 31 st December 2017 for first reporting The total gross amount of income paid or credited to the Account Holder in the reporting period including the aggregate amount of any redemption payments made to the Account Holder during the reporting period

4 Difference between FATCA and CRS Although CRS has been inspired by FATCA, nonetheless, there are significant differences between FATCA and the CRS, to wit: CRS is based on tax residence while FATCA is based on the concept of Specified US Persons (i.e. citizenship) Absence of de minimis rules for individuals under the CRS Different de minimis rule for entities The definition of in-scope and excepted products (life insurance, pension savings products, etc.), which is similar to FATCA, but where the legal wording differs slightly under the CRS The fact that there is only one deemed compliant status for investment funds under the CRS, as opposed to the multiple deemed compliant statuses possible for FATCA The look-through rules for certain investment entities in non-participating jurisdictions, presumed to be Passive NFE for CRS purposes (with in-scope controlling persons to be reported), while these entities could have a different FATCA status, which does not require controlling persons to be identified Absence of withholding penalties under the CRS Complexities By virtue of having different de minimis rules, application of the look through process, less exemptions and affecting a wider range of jurisdictions to name a few, CRS becomes more complex (vide supra) and therefore requires: Multiple reporting for the same client Multiple FATCA and CRS reporting in case a same person (or controlling person of Passive NFFE/ NFE) is Specified US Person and CRS reportable person in one or several jurisdictions CRS reporting volume expected to be substantially increased compared to FATCA Effective dates Please take note that as from 1 January 2017, all entities tax resident in Mauritius would have to comply with CRS, to the extent applicable. Banking institutions are already collecting data by way of self-certification forms. Mauritius Applicability 1 January 2017 deadline September 2018 First reporting period 1 January 2017-31 December 2017

5 List of authorised signatories Intended first information exchange by September 2017 Intended first information exchange by September 2018 Anguilla Argentina Barbados Belgium Bermuda British Virgin Islands Bulgaria Cayman Islands Colombia Croatia Curaçao Cyprus Czech Republic Denmark Estonia Faroe Islands Finland France Germany Gibraltar Greece Greenland Guernsey Hungary Iceland India Ireland Isle of Man Italy Jersey Korea Latvia Liechtenstein Lithuania Luxembourg Malta Mexico Montserrat Netherlands Niue Norway Poland Portugal Romania San Marino Seychelles Slovak Republic Slovenia South Africa Spain Sweden Turks & Caicos Islands United Kingdom Albania Andorra Antigua and Barbuda Aruba Australia Austria Belize Canada Chile China (People s Republic of) Cook Islands Costa Rica Ghana Grenada Indonesia Israel Japan Kuwait Malaysia Marshall Islands Mauritius Monaco Nauru New Zealand Russian Federation Saint Kitts and Nevis Saint Lucia Saint Vincent and the Grenadines Samoa Sint Maarten Switzerland The list of signatories to the MCAA, including Mauritius, can be found here: http://www.oecd.org/tax/autlomatic-exchange/international-framework-for-the-crs/ As of 19 August 2016

6 How can we help? Intercontinental Trust Limited ( ITL ) has been actively involved in several committees, organised by the MRA in collaboration with other key stakeholders from the financial services sector, in order to finalise the Guidance Notes by providing constructive criticism from the Global Business Sector perspective. Thus, our dedicated CRS team has developed a comprehensive knowledge of the legislation and the processes involved. Our existing procedures have been updated to cater for the bespoke due diligence required for both FATCA and CRS. ITL can assist in CRS classification of entities, i.e. assess the structure and activity of the entity(ies) to determine the applicability of CRS and any impending obligations thereof. Furthermore, our CRS team can also assist FIs to ensure the latter are compliant with all ongoing obligations that CRS entails, including but not limited to: Liaising with the Competent Authority to address any CRS-related issues Attention to any CRS queries of the client or such other FI dealing with the client Aid in self-certification On-boarding and due-diligence on new investor(s) including procedures to indicia obligations in respect of any Reportable Accounts; as well as On-going monitoring of any change in circumstances Our profile ITL is licensed by the Mauritius Financial Services Commission ( FSC ) to provide a comprehensive range of financial and fiduciary services to international businesses. Founded in 1999, ITL has established itself as onestop-shop solutions provider in Mauritius. ITL endeavours to provide at all times first class service to its clients in structuring their international affairs and using Mauritius as a base for international transactions. ITL is located in Ebene, the financial centre of Mauritius, where the FSC, the major banks and the Big Four accountancy firms are also located. ITL also has offices in Singapore, Seychelles and representative offices in South Africa and Kenya. ITL was the first management company in Mauritius to have completed an ISAE 3402 Type II audit. ITL was also the first management company in Mauritius to go live with the efront software, a specialised world leading fund administration software. Throughout the years, ITL s leadership in the field has been recognised by various reputable institutions. ITL was the recipient of several awards such as: Best Corporate Finance Advisor of the Year 2015 by Private Equity Africa Best Fund Administrator Mauritius 2015 by Global Banking and Finance Best Alternative Investment Solutions Provider Mauritius 2014 by Wealth and Finance International Best Offshore Financial Services provider 2015 Mauritius by the Corporate Livewire Best Hedge Fund Advisory Firm 2015 Mauritius by Acquisition International Best Customer Service Initiative 2015 by Laserfiche Excellence in Training Award 2014 by Africa Leadership Awards In addition to the above, ITL was also among the top contenders for the Best Fund Administrator of the Year 2015 by Private Equity Africa.

Contact us Intercontinental Trust Limited Level 3, Alexander House 35 Cybercity, Ebene 72201 Mauritius T: 403 08 00 F: 403 08 01 E: info@intercontinentaltrust.com Disclaimer This brochure is for informative purposes only; it has been written in general terms and should be seen as broad guidance only. While every effort is made to ensure that anything contained herein is correct, this content hereof cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained herein without obtaining specific professional advice. ITL neither accepts nor assumes any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it. Readers are advised to consult with appropriate, qualified professional advisors before taking action. Intercontinental Trust Limited will be pleased to discuss any specific issues.