CRS System Allows Polish Tax Authorities Access to Information on Foreign Accounts

The CRS system, or Common Reporting Standard, is an international standard for the exchange of financial account information, introduced by the OECD. Since May 1, 2017, banks and financial institutions in Poland are required to determine the tax residency of their clients and report this information to local tax authorities. These authorities, in turn, exchange data with countries participating in the CRS, of which there are over a hundred. Reporting includes both individuals and entities such as companies and foundations, as well as information about the actual owners of the accounts. The Polish tax office receives information about the balance of accounts held at foreign payment institutions, allowing it to determine how much money the taxpayer has accumulated by the end of the year. However, the system does not provide information about the source of these funds. The tax authorities inquire about the source to establish whether the balance results from interest, dividends, or other assets. If the balance data does not match the tax declarations, the taxpayer must explain this to the tax office.

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