Certification of tax domicile status must for new accounts

MUSCAT, JUNE 29 – Effective from tomorrow, July 1, 2019, Omani banks and financial institutions in the Sultanate will start requiring new customers to certify their tax residency status when opening new accounts. This is in accordance with a commitment by the Omani government to comply with the Common Reporting Standard (CRS), a global standard developed by the Organization for Economic Cooperation and Development (OECD) to support the automatic exchange of financial account information.
Designed to prevent offshore tax evasion, CRS requires financial institutions to identify customer tax residencies and report financial accounts held directly or indirectly by foreign tax residents to local tax authorities. It also obliges tax authorities to exchange this information in a transparent and regular manner. More than 100 countries, including all financial centres around the world, have committed to CRS. According to the Secretariat-General of Taxation (SGT), which operates under the auspices of the Ministry of Finance, CRS applies to a wide range of financial institutions operating in the Sultanate.
Included in the category of ‘Reporting Financial Institutions’ are (i) Depository Institutions (banks, savings/loan institutions, credit unions and so on), (ii) Custodial Institutions (custodian banks, brokers, depositories and so on), (iii) Investment Entities (funds, portfolio managers, investment trusts and so on), (iv) Specified Insurance Companies (life insurance companies) and (v) Non-Reporting Financial Institutions (government entities, pension funds, etc).
All of the above-mentioned ‘Reporting Financial Institutions’ are mandated to obtain the tax residency status of customers opening accounts with them effective from July 1, 2019. In line with this measure, new customers are required to fill out a ‘Self Certification Form’ declaring their tax residency status. For existing account-holders, financial institutions are obliged to initiate the process of obtaining the tax residency status of their customers before the end of this year.
Financial account information of account-holders that are not residents of Oman in terms of their tax status — also known as ‘reportable accounts’ — will be shared with any country with which the Sultanate has an agreement, according to the Secretariat General of Taxation. Safeguards built into the CRS framework ensure that any such information cannot be used for purposes other than those set out in the agreement, without the express consent of the Omani tax department. Significantly, Oman is on track to undertaking next year, the first exchange of financial information for the year 2019, an official confirmed to the Observer.
“We are making good progress in delivering on our commitment to implementing the Common Reporting Standard (CRS) in the Sultanate. To this end, the SGT has also been working closely with other regulatory agencies and stakeholder institutions, such as the Central Bank of Oman, Capital Market Authority, National Centre for Financial Information and Ministry of Finance, to ensure that all of the requisite laws and relevant agreements are formalised and signed before the end of this year,” the official stated.