A Briefing Note on the Mandatory Disclosure Rules on Common Reporting Standard (CRS) Avoidance Arrangements and Opaque Offshore Structures (the Note) was published by the Guernsey Revenue Service.
The Note describes the main features of the Mandatory Disclosure Rules (MDRs) that Guernsey intends to introduce by 31 December 2019 for purposes of the disclosure and exchange of information concerning CRS Avoidance Arrangements and Opaque Offshore Structures.
The MDRs will require promoters and service providers of avoidance schemes to disclose information on the arrangement or offshore structure to the Revenue Service, including the identity of the beneficial owner, which will then be exchanged with the tax authorities of the jurisdiction where the beneficial owner is resident.
According to the MDRs, a CRS Avoidance Arrangement is any arrangement where it is reasonable to conclude it is designed to circumvent the CRS, whereas an Opaque Offshore Structure involves a passive entity that does not carry on substantive economic activity and where the identity of its beneficial owners is not clear. In both cases, the Note emphasizes that the arrangement or structure will be disclosed if it is reasonable to conclude that the intention of the arrangement or the structure is to circumvent the CRS or to obscure beneficial ownership, respectively.
In particular, the briefing notes explained that the following arrangements might be excluded from circumventing the CRS:
Furthermore, a promoter is defined, under the MDRs, as any person who is responsible for the design or marketing of a CRS Avoidance Arrangement or Opaque Offshore Structure, whereas a service provider is defined as any person that provides assistance or advice on the design, implementation or management of such an arrangement or structure.
Broadly, disclosures will be required to be made within 30 days of the date an intermediary makes a CRS avoidance arrangement or opaque offshore structure available, or first provides Relevant Services to such an arrangement or structure. The intention is to coordinate the approach to the timing of the first disclosures to be made in step with the other Crown Dependencies to enable an aligned implementation across each island.
Source: Guernsey Government