An NFE is an Active NFE if it meets any of the criteria listed below. In summary, those criteria refer to:
An entity will be classified as Active NFE if it meets any of the following criteria:
For individual account, it is the person listed or identified as the holder of a Financial Account. A person holding a Financial Account for the benefit of another person as an agent, a custodian, a nominee, a signatory, an investment advisor, an intermediary, or as a legal guardian, is not treated as the Account Holder. For example in the case of a parent/child relationship where the parent is acting as a legal guardian, the child is regarded as the Account Holder. With respect to a jointly held account, each joint holder is treated as an Account Holder. In the case of an estate, the decedent should be identified as the Account Holder.
For entity account, a legal entity is an “Account Holder” when its name is listed or identified as the holder of a Financial Account maintained at GRDA. This is regardless of whether such entity is a flow-through entity for tax purposes. Thus, for example, if a trust is listed as the holder or owner of the Account, the trust is the Account Holder, rather than the trustee, the grantors, the settlors or the beneficiaries. Similarly, if a partnership is listed as the holder or owner of the account, the partnership is the Account Holder, rather than any of the partners.
Control over an entity is generally exercised by the natural person(s) who ultimately has/have a controlling ownership interest (typically on the basis of a certain percentage (e.g. 25%)) in the Entity. Where no natural person(s) exercises control through ownership interests, the Controlling Person(s) of the Entity will be the natural person(s) who exercise(s) control of the Entity through other means. Where no natural person or persons are identified as exercising control of the Entity, (for example where no underlying person has control of greater than 25% of the entity) the Controlling Person of the Entity is deemed to be the natural person who holds the position of senior managing official.
A natural person who exercises control over an entity. Where that entity is treated as a Passive Non-Financial Entity (“NFE”) or an Investment Entity located in a Non-Participating Jurisdiction and managed by another Financial Institution, a Reporting Financial Institution must determine whether such Controlling Persons are Reportable Jurisdiction Persons. This definition corresponds to the term “beneficial owner” of an entity, as described in Recommendation 10 (and the Interpretative Note) of the Financial Action Task Force Recommendations (as adopted in February 2012).
Any natural person who exercises control through direct or indirect ownership of the capital or profits of the partnership, voting rights in the partnership, or who otherwise exercises control over the management of the partnership or similar arrangement.
The settlor(s), the trustee(s), the protector(s) (if any), the beneficiary(ies) or class(es) of beneficiaries, and any other natural person(s) exercising ultimate effective control over the trust (including through a chain of control or ownership). The settlor(s), the trustee(s), the protector(s) (if any), and the beneficiary(ies) or class(es) of beneficiaries, must always be treated as Controlling Persons of a trust, regardless of whether or not any of them exercises control over the activities of the trust. In the case of a legal arrangement other than a trust, such term means persons in equivalent or similar positions.
A legal person or a legal arrangement, such as a corporation, organisation, partnership, trust or foundation.
An account maintained by a Financial Institution and includes but not limited to: Depository Accounts; Custodial Accounts; Equity and debt interests in certain Investment Entities; Cash Value Insurance Contracts; and Annuity Contracts.
A Custodial Institution, a Depository Institution, an Investment Entity, or a Specified Insurance Company.
Includes two types of Entities:
(i) an Entity that primarily conducts as a business one or more of the following activities or operations for or on behalf of a customer:
However, such activities or operations do not include rendering non-binding investment advice to a customer.
(ii) an Entity managed by another Financial Institution is any Entity the gross income of which is primarily attributable to investing, reinvesting, or trading in financial assets where the entity is managed by another entity that is a Depository Institution, a Custodial institution, a Specified Insurance Company or an Investment Entity described in (i) above.
An Entity is “managed by” another Entity if the managing Entity performs, either directly or through another service provider on behalf of the managed Entity, any of the activities or operations described in clause (i) above in the definition of “Investment Entity”.
An Entity only manages another Entity if it has discretionary authority to manage the other Entity’s assets (either in whole or part). Where an Entity is managed by a mix of Financial Institutions, NFEs or individuals, the Entity is considered to be managed by another Entity that is a Depository Institution, a Custodial Institution, a Specified Insurance Company, or the first type of Investment Entity, if any of the managing Entities is such other Entity.
A jurisdiction (i) with which an agreement is in place pursuant to which it will provide the information set out in the Common Reporting Standard and required for automatic exchange of financial account information, and (ii) which is identified in a published list.
Under the CRS any: (i) NFE that is not an Active NFE; and (ii) Investment Entity located in a Non-Participating Jurisdiction and managed by another Financial Institution.
An Entity is related to another Entity if either Entity controls the other Entity or the two Entities are under common control. For this purpose, control includes direct or indirect ownership of more than 50% of the vote and value in an Entity.
An account held by one or more Reportable Persons or by a Passive NFE with one or more Controlling Persons that is/are a Reportable Person(s).
A jurisdiction (i) with which an agreement is in place pursuant to which there is an obligation to provide financial account information set forth in the Common Reporting Standard, and (ii) which is identified in a published list.
An Entity that is resident in a Reportable Jurisdiction(s) under the local tax laws of such country. Generally, an entity will be resident for tax purposes in a jurisdiction, if under the tax laws of that jurisdiction (including tax conventions), it pays or should be paying tax therein by reason of its domicile, residence, place of management or incorporation or any other criterion of a similar nature, and not only from sources in that jurisdiction.
An Entity such as a partnership, limited liability partnership or similar legal arrangement that has no residence for tax purposes shall be treated as resident in the jurisdiction in which its place of effective management is situated. If another type of Entity certifies that it has no residence for tax purposes it should state the address of its principal office. Dual resident Entities may rely on the tiebreaker rules contained in tax conventions (if applicable) to determine their residence for tax purposes.
An individual (or entity) that is a tax resident of a Reportable Jurisdiction under the laws of that jurisdiction. The Account Holder will normally be the “Reportable Person”; however, in the case of an Account Holder that is a Passive NFE or an Investment Entity located in a Non-participating jurisdiction and is managed by another Financial Institution, a Reportable Person also includes any Controlling Persons who are tax resident in a Reportable Jurisdiction.
Is a “Reportable Jurisdiction Person”, other than:
Generally means resident for tax purposes in a particular jurisdiction if, under the laws of that jurisdiction (including tax conventions), it pays or should be paying tax therein by reason of his domicile, residence, place of management or incorporation, or any other criterion of a similar nature, and not only from sources in that jurisdiction.
An Entity such as a partnership, limited liability partnership or similar legal arrangement that has no residence for tax purposes shall be treated as resident in the jurisdiction in which its place of effective management is situated. For additional information on tax residence, please contact your tax adviser or use the OECD AEOI Portal containing information on tax residence in Participating Jurisdictions at www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/.
Any Entity that is an insurance company (or the holding company of an insurance company) that issues, or is obligated to make payments with respect to, a Cash value Insurance Contract or an Annuity contract.
The Taxpayer Identification Number or a functional equivalent in the absence of a TIN. A TIN is a unique combination of letters or numbers assigned by a jurisdiction to an individual or an Entity and used to identify the individual or Entity for the purposes of administering the tax laws of such jurisdiction.
Some jurisdictions do not issue a TIN. However, these jurisdictions often utilize some other high integrity number with an equivalent level of identification (a “functional equivalent”). Examples of that type of number include, for individuals, a social security/insurance number, citizen/personal identification/service code/number and resident registration number.