Advanced CRS training for Cyprus FIs

> OECD Secretariat shatters nil value for settlors of irrevocable trusts
> Akrotiri tax-resident rule used as blocker for settlor of Cyprus trust and facilitates the world’s best asset protection

Treatment of trusts and underlying companies

• Nov 2024: OECD Secretariat coerced Singapore to report total value for settlors of irrevocable trusts: Writing on the wall for Cyprus; China uses Exchange on Demand on nil value trusts.
• When is a settlor of a Cyprus reporting trust not reported (excluding nil value sham)
• When is a trust an FI vs NFE
• Why a Cyprus foundation differs from trusts for AEOI
• HMRC on trusts being a Custodial Institution
• The strangest fee to qualify a trust as a Custodial Institution vs nominee
• Why trustee and custodian fees can be paid to unrelated third parties: some jurisdictions guidance wrong.
• The SPV Custodian mentioned in the OECD CRS FAQ
• If foundation can be a settlor, can a trust be a settlor
• Akrotiri Custodial Institution trust resettling into new trust is a blocker of the settlor, better than nil

Tax residence is a major flaw of CRS

• Why RbI and CbI continue to evade CRS despite OECD update
• Resolving reporting of dual resident companies
• Model Tax Convention Tie Breaker Rules determine residence of untaxed entities (CVI)
• Municipality issued utility bill sufficient proof of residence
• The misunderstanding of residence of untaxed NFEs versus untaxed Investment Entities
• Does 183 days determine sole tax residency
• Where jurisdiction CRS guidelines and seasoned practitioners often misinterpret
• Custodial Institution attributed income-connection test is wrong.
• Where authorities mistake on beneficial owners of listed companies

Investment Entities and Passive NFE

• When is an entity a reporting FI
• Does a corporate director pass the managed test of an Investment Entity?
• Is a director a Controlling Person of an FI. And NFE?
• Can an Active NFE be recategorized a Passive NFE even if doesn’t change its activities
• What scams used to categorize a Personal ETF as a regularly trades?
• Active NFE holding loophole

Crypto Asset Reporting Framework

• The major differences between CRS and CARF
• Which structures are beyond the scope of CRS

Reporting obligations

• Exploit Akrotiri/Dhekelia as location for UK non-resident trusts, optional decanted to Cyprus trusts
• Definitive method to identify account holders and controlling persons for due diligence
• Where an entity will be a CRS FI but not a FATCA FFI – Don’t require a GIIN to be an CRS FI
• Failure to counter «Shell Bank Loophole» identified by the US Senate Finance Committee
• What value reported for Zero Cash Value PPLI and captive
• Consequences of ID Controlling Persons of Passive NFEs regardless status of parent chain
• When must a non-reporting FI report
• Treatment of account holders in non-participating jurisdictions
• What is the difference in non-participating jurisdiction such as Serbia vs Svalbard
• Are all European territories in CRS – TRNC, Åland, Büsingen, Campione, French overseas depts and regions vs collectivities, Netherland municipalities, the 4 British Overseas Territories, Ceuta & Melilla, Norwegian territories and biland, Kosovo, Transnistria, Georgian territories, 4 ex Yugoslavia republics…

CRS flaws

• How Gibraltar/Jersey trust pensions evade CRS
• The custodians – Polar bear, Napoleon, Penguin, Military
• Why BEPS Mandatory Disclosure Rules is a failure
• When is a Holding Investment entity is a non-reportable Active NFE?
• Listing private companies on an exchange is a loophole or not
• Form a NFE company every 2 years as a non-reportable Active NFE is a scam
• Investment entity directed by its owner does not avoid CRS
• Barbados sham insurance to avoid CRS
• «Pasquantino»: advisors helping clients hide in the US can be convicted for wire/mail fraud.
• Can intangible assets, patents, IP convert Passive NFEs into non reportable Active NFEs
• The ignored anti-avoidance clause of shifting assets to a non-participating jurisdiction
• Any jurisdiction utilizing MCAA’s article 29 to exclude territories

Overlooked UK and British Overseas Territories

• UK non-resident trust trumps offshore trusts for flexibility, confidentiality and asset protection
• Why PSC of UK trusts differ from beneficial owner of Cyprus, BVI, Jersey, Singapore cos
• Exploit Akrotiri/Dhekelia as location for UK trusts
• St Helena’s territorial tax
• Falklands no tax on dividends, capital gains
• Ascension as corporate trustee