Change in Circumstance (CIC)
A change in circumstance is a term used to describe a change in your information that will affect your FATCA or CRS classification and reportable status.
This is a CIC
- Your address changed because you moved abroad. This change may mean that your accounts could change from reportable to not reportable or vice versa.
This is NOT a CIC
- You got married and need to update your name with the bank. This data is very important but for FATCA and CRS this is not deemed a change in circumstance as it does not affect your classification or reporting status.
We understand it may be difficult to identify a change in circumstance. If any information you added to a self-certificate changes, inform ING within 60 days. We will let you know if you need to do anything or if your reportable status is affected.
(Offshore) Tax Evasion
The illegal non-payment or underpayment of taxes. For example, a person or legal entity intentionally establishes offshore constructions with the goal to disguise ownership and/or control, leading to non-adherence to applicable laws regarding tax liability.
(Aggressive) Tax Avoidance
An arrangement of a taxpayer's affairs that is intended to reduce his/hers tax liability, which although strictly legal, is in contradiction with the intent of the law it purports to follow. A distinction can be made between aggressive tax avoidance (in practice also referred to as aggressive tax planning) and acceptable tax planning.
Local Tax Authority
This is a term used to describe the tax office of a country. Example: In the Netherlands, the tax office is called - Belastingdienst. Therefore, for the Netherlands, this is what is meant by local tax authority for FATCA and CRS.
(Foreign) Financial Institution (FFI/FI)
The word foreign here is important. It is only used for FATCA and it is used from the US perspective. Any financial institution (FI) that is not a US FI is a foreign financial institution (FFI).
As CRS is a global standard, it refers to FIs and does not use the word ‘foreign’.
The definition of an FI applies to US and non-US entities for both FATCA and CRS. The definition may be broader than used by your business previously. The definition includes:
- Depositary institutions (for example Banks)
- Custodial institutions (for example Mutual Funds)
- Investment entities (For example Hedge Funds)
- Certain Insurance companies and
- Holding companies for other FIs
CRS Participating Jurisdiction
The term ‘Participating Jurisdiction’ simply means a country that has agreed to implement the Common Reporting Standard. There are over 100 countries that have implemented the CRS with others still joining.
A full list of participating jurisdictions and the year they joined can be found here.
The definition of tax residence varies per country. The general principles are as follows:
- For a private individual, tax residence is typically the country where they live, reside or are domiciled.
- For a legal entity, tax residence is typically the country where it pays/should pay tax by reason of domicile, residence, place of management or incorporation, or any other criteria of a similar nature.
In most cases, a private individual or legal entity has a single tax residence. However, multiple tax residences are possible.