According to the OECD, potentially high-risk CBI/RBI schemes are those that give access to a low personal tax rate on income from foreign financial assets and do not require an individual to spend a significant amount of time in the jurisdiction offering the scheme. Such schemes, according to OECD research, are currently operated by Antigua and Barbuda, The Bahamas, Bahrain, Barbados, Cyprus, Dominica, Grenada, Malaysia, Malta, Panama, Qatar, Saint Kitts and Nevis, Saint Lucia, Seychelles, Turks and Caicos Islands, United Arab Emirates and Vanuatu (as of 22 October 2018).
Together with the results of the analysis, the OECD has also published FAQs that will enable financial institutions to identify and prevent CRS avoidance through the use of such schemes. In particular, the OECD expects that financial institutions consider raising further questions if a client is resident in one of the above mentioned countries:
- Did the client obtain residence rights under a CBI/RBI scheme?
- Does the client hold residence rights in any other jurisdiction(s)?
- Did the client spend more than 90 days in any other jurisdiction(s) during the previous year?
- In which jurisdiction(s) has the client filed personal income tax returns during the previous year?
The responses to the above questions should assist financial institutions in ascertaining whether the provided AEoI self-certification is incorrect or unreliable.