CRS/FATCA Step by step

In this step by step guidance, you can read about which enterprises are covered by the reporting obligations implementing CRS and FATCA as financial institutions, the exceptions that apply, and what obligations financial institutions have. We have also summarised what must be reported and how this can be done

Declarants are:

  • enterprises that receive deposits as part of ordinary banking activity or other similar business. Enterprises that grant credit and allow the customer to pay in an amount exceeding the outstanding amount, without this amount being immediately returned to the customer, are considered to receive deposits.
  • enterprises that hold or manage financial instruments and other financial products on behalf of others as a part of their business. Securities held in a central securities depository are considered to be managed by the account operator.
  • insurance companies and others that issue or are obligated to make payments under an insurance agreement with a surrender value, or to make payments under a pension agreement, an annuity contract, or another contract when the time frame for payment is fully or partly determined with reference to the anticipated life expectancy of one or more natural persons.
  • enterprises that have received more than 50 per cent of their gross income over the past three financial years from one or more of the following activities or operations, exercised in business activities for or on behalf of a customer:
    • trading in money market instruments (cheques, bills, certificates of deposit, derivatives, etc.), foreign exchange, exchange, interest rate and index instruments, transferable securities or commodity futures trading,
    • individual and collective portfolio management, or
    • otherwise investing, administering, or managing financial instruments and other financial products or money on behalf of other persons
  • entities with income from investing, reinvesting or trading in financial instruments and other financial products, which are governed, administered or otherwise managed by an entity referred to above.
  • If an enterprise carries out activity described above, further consideration must be given to whether the enterprise is covered.

Some enterprises are entirely or partially exempt from the reporting obligation which implements CRS/FATCA, even though the enterprise is considered a financial institution.

In brief, the exemptions concern:

  • the Norwegian State, government bodies and wholly owned enterprises
  • Norges Bank and subsidiaries
  • international organisations (Intergovernmental and supranational organisations)
  • pension funds, depository pension enterprises and private pension funds established before 1968
  • credit card issuers that only have credit cards with deposit limits
  • non-profit organisations (partial exemption)
  • local credit unions (partial exemption)
  • local banks (partial exemption)
  • financial institutions which manage low value accounts (partial exemption)
  • small financial institutions with a local client base (partial exemption)
  • mutual fund and alternative investment funds (partial exemption)

If an enterprise may be covered by the exemptions described above, further consideration must be given to whether the enterprise is covered. You will find more information on which enterprises are covered by the reporting obligation in the guidance.

Financial institutions must register with the US tax authorities in order to be allocated a Global Intermediary Identification Number (GIIN). GIIN is obligatory in connection with the submission of FATCA information to the Norwegian Tax Administration.

Companies etc. that are not covered by the reporting obligation or that are exempt should not be registered.

Declarants that act as "sponsors" for other entities must be registered as a "sponsoring entity", while the other entities must be registered as a "sponsored entity".

We recommend that declarants register well before the deadline for the submission of information to the Norwegian Tax Administration, as the registration process can take a while.

Registration must take place in accordance with the applicable guidelines from the US tax authorities, which can be found at www.irs.gov/fatca

Any questions linked to registration must be addressed to the US tax authorities.

The reporting obligation which implements CRS and FATCA covers:

  • deposit accounts
  • financial instruments and other financial products held in accounts
  • units in mutual funds
  • debt and equity interests in alternative investment funds
  • debt and equity interests in other professionally managed companies, etc.
  • annuities
  • cash value insurance schemes

You will find more information on which products are covered by the reporting obligation in the guidance.

The reporting obligation which implements CRS and FATCA does not cover:

  • property savings accounts for young people (BSU)
  • tax-favourable pension schemes (IPS/IPA)
  • credit card accounts with depository limits
  • accounts in the name of a deceased person
  • escrow accounts
  • inactive depository accounts
  • certain units in trusts (partial exemption)
  • collective annuities (partial exemption)

You will find more information on which products are exempt from the reporting obligation in the guidance.

It must be investigated where account holders are resident for tax purposes. If the account holder is resident in a country other than Norway for tax purposes, a tax identification number (TIN) must be obtained for countries that issue this.

The account holder is a natural person:

  • Is the account holder a tax resident/domiciled in another country?
  • Is the account holder a US citizen?
  • Is account holder born in the United States?

A self-declaration must be obtained stating where the account holder is tax resident/domiciled when establishing an account relationship. The self-declaration must contain the information that follows from Section 7-3-31 of the Tax Administration Regulations.

Changes and new information must be followed up by the financial institution. You can find more information on how to conduct the investigations in our Guidance on International Reporting.

NB: If the account holder states that they have renounced their US citizenship, the financial institution must obtain documentation from the account holder confirming this.

It will be investigated where account holders and beneficial owners are resident/resident for tax purposes. If the account holder is resident in a country other than Norway for tax purposes, a foreign identification number (TIN) must also be obtained.

The account holder is a company, etc.:

  • Is the account holder tax domiciled in another country?
  • Is the account holder exempt from the duty of disclosure because the company's shares are regularly traded in an established securities market, or is it a foreign public entity, financial institution, etc.?
  • Is the account holder a non-participating financial institution as defined in FATCA?
  • Is the account holder a passive non-financial institution?

A self-declaration must be obtained showing where the account holder is tax domiciled when establishing an account relationship. The self-declaration must contain the information that follows from Section 7-3-32 of the Tax Administration Regulations.

Financial institutions must provide the account holder with the opportunity to decide whether they are a financial institution or a passive non-financial institution as part of the self-declaration.

Beneficial owners:

  • Beneficial owners are natural persons who ultimately own or control a company, and who have been identified under the Money Laundering Act.
  • It shall be investigated where beneficial owners are tax resident/domiciled when the company, which is the account holder mainly has passive income/assets.
  • Is the beneficial owner resident in another country for tax purposes?
  • Is the beneficial owner a US citizen?
  • Is beneficial owner born in USA?

A self-declaration must be obtained stating where the beneficial owners are tax resident/domiciled when establishing an account relationship, if the account holder is a passive, non-financial institution. The self-declaration for beneficial owners must contain the information that follows from Section 7-3-31 of the Tax Administration Regulations.

Beneficial owners who are tax resident/domiciled in the United States or U.S. citizens must not be identified when:

  • The Account Holder is established in a US territory and all the owners of the payee are bona fide residents of the US territory in question, or
  • Account Holder is a non-US government, a government of a US territory, an international organisation, a non-US central bank or an entity wholly owned by one or more of the above.

NB: If the beneficial owner states that they have renounced their US citizenship, the financial institution must obtain documentation from the account holder confirming this.

Financial institutions must assess whether the information provided in the self-declaration is reliable on the basis of other information obtained when opening an account. If the information is not reliable, a new self-declaration or a reasonable explanation with associated documentation must be obtained.

When assessing reliability, it may be useful to obtain information from public registers. Information from the National Population Register can provide information on whether they are resident/emigrated from Norway, citizenship and country of birth. What the customer answers in the self-declaration should be checked against data registered in the National Population Register, and then we are thinking in particular of the residential address, in order to be able to determine where the customer is resident for tax purposes.

Accounting data can be important in determining whether an entity is an active or passive non-financial institution.

Ongoing follow-up:

Financial institutions are recommended to have procedures in place for annual follow-up of companies if they are passive non-financial institutions, as this can change from one year to the next, which in turn has an impact on whether beneficial owners are to be identified.

The information that is reported on the basis of CRS and FATCA must include:

  • the declarant's name, address, organisation number and Global Intermediary Identification Number (GIIN)
  • the account holder’s/beneficial owner's name, address with country code, Norwegian ID/D number or organisation number, foreign country code and foreign identification number
  • account information, such as account number and type, country code and the account's balance or value as of the end of the income year
  • return in the form of interest, dividends, etc.
  • gross proceeds

Information concerning where account holders are tax resident, as well as foreign ID numbers, must be submitted as from the income year in which a self-certification statement is obtained or customer information linked to existing accounts is examined.

Declarants must submit CRS/FATCA information via these schemes:

You will find more information on how to submit information here.

Please note that the deadlines apply to the individual schemes.

Before and after reporting CRS/FATCA information, financial institutions should consider the following:

  • Has the financial institution taken random samples to check whether what they expected to be reported matches what is reported?
  • Does the information in the financial institution's source system match what is reported?
  • Has the financial institution reviewed the reporting feedback and made corrections?

If the financial institution uses a service provider for reporting CRS/FATCA information, the financial institution is recommended to consider the following:

  • Has the information the service provider reports on behalf of the financial institution been sampled?
  • Is information in the financial institution's systems the same as what is reported by the service provider?
  • Has the financial institution received the feedback showing discrepancies and errors from the service provider that the Tax Administration creates when reporting the CRS/FATCA information
  • Has the financial institution reviewed the reporting feedback and made corrections by the February 10 deadline?

NB: It is recommended that financial institutions include a checklist in their routines so that the reporting is as correct as possible.