Automatic exchange of information under the OECD Common Reporting Standard (CRS) has, in practice, brought international banking secrecy to an end. Since 2017/2018, more than 100 countries have been exchanging financial account data every year. For many wealthy individuals, this is not merely a technical issue – it is a strategic one. Because without global data transparency, a co-ordinated wealth taxation regime within the EU would be politically and practically very difficult to implement.
But how does the OECD CRS actually work in practice? Which data are really transmitted? And is there genuinely a connection to potential EU wealth levies or wealth registers?
This article brings structure to the topic in a factual way, grounded in law and without alarmism.
The Common Reporting Standard (CRS) was developed by the OECD to combat tax evasion via offshore accounts. The idea is simple:
Banks report relevant account data to their national tax authority, which then automatically forwards the information to the account holder’s country of tax residence.
Germany therefore receives data on German taxpayers with accounts abroad and, conversely, transmits data on foreign taxpayers with accounts in Germany.
CRS is not an EU project, but a global standard. However, the EU has incorporated it into European law via the so-called “DAC2 Directive”.
In many CRS countries (including Germany), 31 July is treated as the key reporting deadline:
By this date, banks and other financial institutions must submit the reportable data for the previous year to the national tax authority.
These data are then forwarded automatically to the relevant jurisdictions.
In practical terms, that means:
So CRS is not a one-off tool, but a systematic mass-data process.
A common misconception: many people believe complete bank statements are automatically sent. That is not the case.
What is generally transmitted includes:
Name, address, date of birth
Tax Identification Number (TIN)
Account number
Account balance at year end
Gross payments such as interest, dividends or disposal proceeds
What is not transmitted:
So it is about structured financial metrics, not complete transaction histories.
In practice, problems around the OECD CRS rarely arise because someone holds an account “in secret”, but because master data, tax residence or structural classifications are not properly maintained. A classic example: the bank has an old address or an incorrect tax ID on file. In that case, the account may be reported to the wrong country, or queries arise even though everything is tax-compliant. Anyone who moves home or has multiple places of residence should therefore consistently ensure that TINs, proof of residence and residency details are up to date and consistent across all financial institutions.
A second common error concerns companies and structures. Banks must decide whether a company is “active” or “passive” and whether beneficial owners (“Controlling Persons”) must be reported. Especially with holding companies, asset-holding vehicles or trading structures, an incorrect self-certification can mean data are reported unexpectedly or follow-up questions are triggered that later become laborious to explain. The key point here is: do not classify “optimistically”, but realistically based on activity, income profile and substance.
Third point: many underestimate the impact of CRS when combined with tax returns. While the dataset does not include individual transactions, it provides enough to trigger plausibility checks – for example by comparing account balances, investment income and residence. If you do things properly, you have nothing to fear. If you “forget”, your position today is far weaker than it was ten years ago.
More than 100 countries participate in CRS, including nearly all EU Member States, classic financial centres such as Switzerland or Singapore, as well as numerous offshore jurisdictions.
The USA, among others, does not participate; it uses its own system instead: FATCA (Foreign Account Tax Compliance Act). FATCA is also based on data exchange, but it operates differently and is far more US-centred.
This means the USA remains something of a special case.
Yes, but in a differentiated way.
What matters is the classification as:
Active Non-Financial Entity (Active NFE)
Passive Non-Financial Entity (Passive NFE)
Operating companies with genuine business activity are often considered “active” and are not affected to the same extent.
It is different for:
holding companies
pure investment companies
asset-holding structures
Here, beneficial owners are identified and reported.
The classification is made by the bank on the basis of a self-certification.
At EU level, there are regular political discussions about wealth registers, wealth levies or minimum taxation models.
What matters is this:
CRS was originally developed to combat tax evasion – not as a wealth-tax tool.
But in practice CRS creates something decisive:
A standardised, global data base on financial assets.
Without such transparency, cross-border wealth taxation would be administratively very hard to implement.
CRS is therefore not automatically a “pre-stage of a wealth tax”, but it provides the technical infrastructure that would make such concepts workable in the first place.
For law-abiding taxpayers, CRS is generally unproblematic.
It only becomes problematic if:
The reality is straightforward:
Tax authorities today learn about foreign accounts far more quickly than they did ten years ago.
The strategic focus therefore shifts from “hiding” to “structuring properly”.
A frequently discussed question is:
Does CRS lead to capital flight into non-CRS countries?
In the short term, there were movements of this kind. In the long term, however, the trend is clear: the number of non-participants is shrinking. Banking without transparency is becoming increasingly risky from a regulatory perspective.
Even supposedly “alternative jurisdictions” are under pressure to align with international standards.
As a rule, CRS is based on tax residence, not nationality.
An exception is the USA, which taxes its citizens worldwide (citizenship-based taxation). That is why FATCA is citizenship-oriented.
Under CRS, by contrast, the key questions are:
Where are you tax resident?
Where is your centre of life?
Not: what citizenship do you hold?
No, but it changes the rules of the game.
Lawful international tax planning remains possible.
What no longer works is:
undeclared foreign accounts
sham arrangements without substance
formal structures with no real economic logic
The era of opacity is over. The era of clean, robust structuring has arrived.
At EU level, as well as wealth taxes, there is also discussion of wealth registers. According to supporters, the aim is:
Whether and when a genuine EU-wide wealth tax will arrive is currently uncertain and politically contentious.
One thing is clear, though:
Without a data foundation such as CRS, such a project would be administratively very difficult to deliver.
The OECD CRS is not a “secret surveillance mechanism”, but a standardised exchange of information between tax authorities.
It provides:
structured wealth data
international comparability
automated matching capabilities
For compliant taxpayers, this is not a problem.
For wealthy individuals, however, it means: international structures must be real, economically sensible and tax-compliant.
The debate about EU wealth taxes may be politically charged – but technically speaking, CRS is first and foremost a transparency instrument.
And transparency is now a global standard.
