What is CRS? The Common Reporting Standard (CRS) is a global tax transparency framework developed by the OECD to prevent offshore tax evasion. Adopted by Singapore in 2017, CRS requires Reporting Singapore Financial Institutions (SGFIs) such as banks, custodians, investment entities, and specified insurance companies to identify reportable accounts, collect key account holder data, and submit annual reports to the Inland Revenue Authority of Singapore (IRAS) for tax calculations. These reports are then exchanged with other jurisdictions where account holders are tax residents.
In Singapore, CRS obligations include registering with IRAS by 31 March of the following year after becoming a Reporting SGFI, and filing annual returns by 31 May. Even entities with no reportable accounts must submit “nil returns.” Non-compliance can result in penalties, audits, and possible reputational damage to the company.
For startups and SMEs, CRS matters because even small investment-related entities may qualify as Reporting SGFIs, impacting banking relationships and investor credibility. Compliance, while complex, builds trust, prevents penalties, and aligns businesses with international standards. Many organisations benefit from outsourcing CRS compliance to accounting and tax advisors, ensuring accuracy and efficiency.
Looking ahead, CRS will continue evolving to cover digital banking and crypto-assets, making proactive compliance essential for Singapore businesses.
Globalisation has made it easier for money to move across borders, but it has also created new obstacles for governments trying to ensure fair taxation. When people and businesses hold accounts abroad, it becomes challenging for tax authorities to track income and assets, and ensure tax collections are transparent and fair. To address this, countries have worked together to create the Common Reporting Standards (CRS).
If you’ve been asking questions like what is CRS, what is Common Reporting Standard, or what is Common Reporting Standard Singapore, this article provides a clear, practical explanation. We’ll look at what CRS means, how it works in Singapore, who needs to comply, and why compliance matters for all businesses.
What is the Common Reporting Standard (CRS) in Singapore
The Common Reporting Standard (CRS) is a framework developed by the Organisation for Economic Co-operation and Development (OECD) to improve tax transparency and tackle offshore tax evasion. It requires financial institutions in participating countries to share account information with tax authorities, who then exchange it with other countries where the account holders are tax residents.
In Singapore, CRS was formally adopted in 2017, and reporting began in 2018. Since then, all relevant Singapore Financial Institutions (SGFIs) must comply with CRS rules, registering with the Inland Revenue Authority of Singapore (IRAS) and submitting annual reports. CRS compliance is part of Singapore’s broader vision towards global tax transparency while also maintaining its position as a trusted financial hub.
CRS Meaning & Origin
CRS was approved and launched by the OECD in 2014. Its broader outline is inspired mainly by the U.S. Foreign Account Tax Compliance Act (FATCA), which required foreign financial institutions to report information about U.S. taxpayers to the Internal Revenue Service (IRS). While FATCA applied only to the U.S., CRS was designed as a global standard.
Over 100 jurisdictions, including Singapore, have now committed to CRS, making it one of the most significant international tax initiatives of the modern era. Its core aim ensures that taxpayers cannot hide income or assets offshore to avoid paying taxes in their home countries.
Purpose of CRS
The purpose of CRS is simple: to promote transparency and reduce opportunities for tax evasion. By requiring automatic annual exchange of financial account information between countries, CRS ensures that tax authorities can identify individuals and businesses who might otherwise underreport their income and evade taxes.
For Singapore, implementing CRS strengthens its reputation as a trusted financial centre. It shows the country’s commitment to upholding international tax standards and supporting global cooperation.
CRS Singapore Reporting Deadlines
In Singapore, CRS compliance is managed by IRAS. The key deadlines are:
- Registration: Entities that qualify as Reporting SGFIs (Singaporean Financial Institutions) must register with IRAS by 31 March of the year following the date they become a Reporting SGFI.
For example, an entity that becomes a Reporting Singaporean Financial Institution (SGFI) between 1 January and 31 December (both dates inclusive) of the year should register for CRS by 31 March of the following year.
- Filing: Annual CRS returns must be submitted to IRAS by 31 May of the year following the reporting year. Even if an SGFI has no reportable accounts, a “nil return” is still required.
Failing to meet these deadlines can result in financial penalties, enforcement actions, and reputational damage.
How the Common Reporting Standard Works
CRS works through a cycle of identification, reporting, and information exchange. Here’s how it operates in practice:
- Identification – Financial institutions conduct due diligence on both new and existing accounts to determine if the account holders are tax residents of another CRS jurisdiction.
- Data Collection – Institutions collect information such as name, address, date of birth, Tax Identification Number (TIN), account balances, and income.
- Reporting – This information is reported annually to the Inland Revenue Authority of Singapore.
- Exchange – IRAS then securely shares the information with other tax authorities in jurisdictions where the account holders are tax residents.
This automated system ensures that authorities around the world can detect tax evasion and enforce tax compliance efficiently.
Common Reporting Standard Guidelines
The Common Reporting Standard guidelines set out the obligations and processes financial institutions must follow. These guidelines cover how institutions should classify themselves, conduct due diligence, report data, and maintain compliance with applicable laws.
CRS Rules & Framework
The CRS framework includes:
- Scope of reporting institutions: There are four types of institutions covered by the CRS: custodial institutions, depository institutions, investment entities, and specified insurance companies.
- Reportable accounts: Accounts held by individuals and entities who are tax residents in other CRS jurisdictions.
- Due diligence: Financial institutions must obtain self-certifications from account holders and verify tax residency information.
- Reporting format: Data must be filed electronically, using IRAS-approved formats.
These rules ensure that all institutions apply consistent standards when identifying and reporting account holders.
Role of IRAS in CRS Compliance
The Inland Revenue Authority of Singapore (IRAS) is the regulatory body responsible for enforcing CRS. Its role includes:
- Requiring SGFIs to register and file reports.
- Issuing compliance guidelines and technical updates.
- Conducting audits and inspections to verify compliance.
- Enforcing penalties for late or inaccurate submissions.
IRAS also provides detailed e-Tax guides and compliance checklists to help businesses recognise, understand, and fulfil their obligations.
CRS Obligations for Financial Institutions
Who Must Comply with CRS
Not all financial institutions fall under CRS, but many do. The categories include:
- Custodial institutions – Entities that hold financial assets for others, such as brokers and custodians.
- Depository institutions – Entities that accept deposits, such as banks and credit unions.
- Investment entities – Entities mainly engaged in investing and managing financial assets.
- Specified insurance companies – Life insurance companies offering cash value or annuity contracts.
If your organisation falls into one of these categories and is tax resident in Singapore, you must comply with CRS.
CRS Impact on Businesses & Investors
Why Startups & SMEs Should Care
Startups and SMEs may assume that since CRS is such a vast law, it only applies to large financial institutions. However, smaller entities can also be classified as Reporting SGFIs. For example, an SME providing investment management services could fall under CRS rules.
Even if your business does not directly manage customer accounts, compliance may affect you indirectly through client reporting requirements, banking relationships, or investor due diligence. Non-compliance could restrict access to banking services, limit growth opportunities, and damage credibility with partners.
Benefits of CRS Compliance
While CRS compliance may feel like an administrative burden, it also offers benefits:
- Reputation and trust – Compliance showcases transparency, which strengthens credibility with investors and regulators.
- Global readiness – Following global standards positions your business as trustworthy across the world.
- Avoidance of penalties – Meeting obligations helps prevent fines, enforcement action, and any harm to the organisation’s reputation.
- Better financial practices – Stronger data collection and reporting systems improve overall governance.
How to Stay CRS Compliant in Singapore
CRS Compliance Checklist for Businesses: Step-by-step
- Classify your entity – Determine whether you qualify as a Reporting SGFI.
- Register with IRAS – If you qualify, register by 31 March of the following year.
- Conduct due diligence – Identify reportable accounts and collect necessary information from account holders to be dispensed to the requisite authorities, like the IRAS.
- Implement compliance systems – Establish policies, controls, checks, and record-keeping processes.
- File annual returns – Submit CRS reports (or nil returns) to IRAS by 31 May.
- Monitor regulatory updates – Stay informed about changes to CRS rules and IRAS guidelines.
- Correct errors promptly – If errors are identified, report and rectify them immediately.
Role of Accounting & Tax Advisors – Why outsourcing helps?
Navigating CRS can be complex, particularly for smaller businesses without in-house compliance teams. This is where professional Accounting Services and tax advisors play an essential role.
Outsourcing CRS compliance helps businesses:
- Ensure accurate classification and reporting.
- Reduce the risk of errors and penalties.
- Save time by allowing experts to manage technical details.
- Focus internal resources on growth and operations.
Specialist advisors also have up-to-date knowledge of ACRA requirements, accounting tax rules, and IRAS compliance frameworks, making them valuable partners for ongoing CRS obligations.
Future of CRS and Global Tax Compliance
How Digital Banking May Influence CRS: Emerging Trends
The financial industry is rapidly changing, and digital banking is reshaping how accounts are opened and managed. This creates both opportunities and challenges for CRS.
On the one hand, digital banking makes it easier to track and record account information. On the other hand, it increases the risk of complex cross-border financial flows or hoarding of black money in foreign accounts.
To address this, CRS must evolve to incorporate new technologies and expand to cover emerging financial products such as crypto-assets and assets managed by blockchain and Web3 technology.
For Singapore, maintaining a strong CRS framework will be key to staying competitive as a financial hub while aligning with international expectations.
Compliance Made Simple with Lanturn
The Common Reporting Standard (CRS) is more than just another regulation; it is part of a global effort to ensure transparent and fair taxation in accordance with the law. In Singapore, CRS is stringently enforced by the Inland Revenue Authority of Singapore, with clear rules, strict deadlines, and significant penalties for non-compliance.
Startups, SMEs, and large institutions alike must pay heed to their CRS obligations. By working with trusted advisors, leveraging Accounting Services, understanding obligations, and staying proactive with compliance, businesses can not only meet their legal requirements but also strengthen their reputation and long-term growth potential in the market. At Lanturn, compliance is never left to chance. Our team of compliance experts will guide you every step of the way, ensuring you comply with CRS obligations and giving you peace of mind while you focus on scaling your business. Schedule a call with us today.
FAQs
What is the Common Reporting Standard (CRS) in simple terms?
CRS is a global regulation system where financial institutions share account information with tax authorities to prevent offshore tax evasion.
Who introduced the Common Reporting Standard?
The OECD introduced CRS in 2014 as a global framework for automatic exchange of financial account information to prevent tax evasion.
What is the purpose of CRS in Singapore?
The purpose is to ensure tax transparency by requiring Singapore financial institutions to report account information to IRAS, which is then shared with other tax authorities.
Who needs to comply with CRS?
Financial institutions like banks, custodial institutions, depository institutions, investment entities, and certain insurance companies tax-resident in Singapore.
What happens if you don’t follow CRS guidelines?
Non-compliance can result in fines, daily penalties, reputational damage, and even restrictions on doing business internationally.
What’s the difference between CRS and FATCA?
FATCA applies only to U.S. taxpayers, while CRS is a global system adopted by over 100 jurisdictions, including Singapore.
Is CRS mandatory for all Singapore financial institutions?
Only those that fall under the definition of Reporting SGFIs, including SMEs, startups, and larger financial institutions, are required to comply with CRS rules.
