SINGAPORE financial institutions are poised to carry out their first round of reporting to the Inland Revenue Authority of Singapore under the Common Reporting Standard (CRS). Even at this late stage, there remains some uncertainty in the industry about how certain entities should be classified, and what data needs to be collected and reported. This is particularly the case for boutique wealth managers (for example family offices and funds) that are administering collective investments for small numbers of participants.

The CRS is the term given to the "global standard for automatic exchange of financial account information", a complex-sounding piece of jargon at best. These nine words are a distillation of an ambitious project to tackle global tax evasion. The regulation had its roots in the fiscal deficits arising from the global financial crisis, and was forerun with previous legislation, notably the US Foreign Account Tax Compliance Act (Fatca) and the EU Savings Directive. The gist is that countries will now exchange financial information on one another's tax residents, so that the home jurisdiction may detect any possible tax evasion. This is a paradigm shift for tax assessment: it replaces the previous approach of requesting information, with the automatic provision of that information.

The CRS is currently a hot topic in the financial services industry in Singapore. Countries have adopted the standard at different intervals, and Singapore (along with many other Asian countries) have been part of the second "wave" of implementation. Almost everyone in Singapore - and indeed more widely across Asia - are trying to get their heads around what they need to do to comply.