Banking AEI (Automatic Exchange of Information)
AEI (Automatic Exchange of Information)
What is the Automatic Exchange of Information?
The Automatic Exchange of Information (AEI) is a tax standard that governs how tax authorities of participating countries exchange information related to taxpayers’ foreign bank and safekeeping accounts with one another. The AEI standard has been developed and published by the Organization for Economic Cooperation and Development (OECD).
The AEI standard will be implemented globally; approximately 100 countries have already committed to implementing this initiative. Participating countries will sign agreements and enact domestic laws to commence the implementation of the AEI standard. The so-called "Wave 1" countries, also known as "Early Adopters", implemented the AEI on January 1, 2016, with the first exchange of information to take place in 2017. So-called "Wave 2", countries (which include Switzerland) will implement the standard by January 1, 2017. The first exchange of information involving these countries is to take place in the year 2018. Further countries are expected to follow.
The AEI standard requires financial institutions (e.g. banks) in participating countries to identify all clients (incl. the controlling persons of certain entity clients) that are residents of another participating jurisdiction. Once such a reportable person is identified, the financial institution will report annually the relevant information to its domestic tax authorities, which will forward the data to the tax authority of the jurisdiction in which the reportable person is resident for tax purposes.
The following information is to be reported by the financial institutions and will be exchanged with the tax authorities in the client's country of tax residence:
- Identification information (e.g. name of the natural person or entity, address, country of residence for tax purposes, taxpayer identification number and date of birth);
- Account information (e.g. name of the financial institution and account number); and
- Financial information (e.g. account balance, dividends, income, other income and gross proceeds)
What are the implications of the AEI for bank clients?
The AEI standard requires banks to extend their current client identification and documentation procedures for both new and existing clients. These requirements are pertinent to both individual clients and entities (e.g. corporations, trusts, etc.). Based on these enhanced due diligence procedures, clients are required to provide banks with specific information and documentation establishing their status for the purposes of the AEI.
Credit Suisse has long been pursuing a strategy that focuses on tax compliance and supports measures that help to ensure that funds received from clients are taxed. Therefore, Credit Suisse is in favor of the AEI as a global standard. The bank will get in touch with clients in due course if their relationship with Credit Suisse is relevant under the AEI.
While Credit Suisse and its employees cannot provide clients with any legal or tax advice, clients are welcome to contact their relationship managers at any time for further information, or they can visit the OECD page.
The following documents provide clients with information about whether their tax residence is in an AEI participating and/or reporting jurisdiction. Information in this regard can be found in the document for the country in which the Credit Suisse account or accounts is or are managed.
The Entity Classification Guide is intended to assist in determining an Entity’s AEI Classification and in completing the documentation that is required by Credit Suisse for an Entity's AEI Classification. The content of this document is based on currently available AEI information. The document will be amended if and when any further relevant information is released.
This document contains a visualization of the classification process in simplified form. The text descriptions help to accurately determine an Entity's AEI Classification.
Any terms not described in this document are defined in the Glossary.