OECD consults on common reporting standard loophole
The OECD has launched a consultation on the potential misuse of residence by investment (RBI) schemes to circumvent the common reporting standard (CRS), after collecting information to suggest the practice is becoming more prevalent
21 Feb 2018
The OECD says more and more jurisdictions are offering RBI or ‘citizenship by investment’ (CBI) schemes, which allow foreign individuals to obtain citizenship or temporary or permanent residence rights in exchange for local investments or against a flat fee.
While individuals may be interested in these schemes for a number of legitimate reasons, including greater mobility thanks to visa-free travel, better education and job opportunities for children, or the right to live in a country with political stability, the OECD says data from its CRS public disclosure facility and other sources highlights the misuse of RBI and CBI schemes to circumvent reporting under the CRS.
The consultation will assess how these schemes are used in an attempt to circumvent the CRS; identify the types of schemes that present a high risk of abuse; remind stakeholders of the importance of correctly applying relevant CRS due diligence procedures in order to help prevent such abuse; and explain next steps the OECD will undertake to further address the issue.
The OECD is now asking for feedback, both to obtain further evidence on the misuse of CBI/RBI schemes, and on effective ways for preventing such abuse.
The deadline for comments on the consultation is 19 March.
Report by Pat Sweet