The automatic exchange of tax information (CRS - Common Reporting Standard) is an international standard for the exchange of financial information developed by the OECD (Organization for Economic Co-operation and Development). It was created to combat tax evasion through foreign accounts and offshores. Georgia, having become a participant in the CRS, is obliged to transfer and receive data on financial accounts of non-residents with other CRS participant countries.

How does CRS work?

1. Collection of information by banks and financial institutions:

• All financial institutions (banks, investment funds, insurance companies) are required to collect and verify information about the tax residency of their clients.
• When opening an account or updating data, clients fill out a questionnaire about their tax residency (Self-Certification Form).
• The bank collects data such as name, address, date and place of birth, tax identification number (TIN), as well as information about the account balance and income (interest, dividends and other income).

Reporting to the tax service:

• Financial institutions prepare a report for the local tax authority (in the case of Georgia, this is the Georgian Revenue Service) every year.
• The report contains information about the financial accounts of non-residents.

International exchange data:

• The Georgian tax authority exchanges this information with tax authorities of other countries that are CRS participants.
• The exchange takes place annually, usually by September of the following year.

What information is transferred?

Financial institutions transfer the following information about non-resident accounts:

• Personal information of the account holder: name, address, date and place of birth, tax number.
• Account number and type (e.g. deposit, investment).
• Account balance at the end of the reporting year.
• Income received on the account, such as interest, dividends, income from the sale of assets.

To which countries will the information be sent?

• Georgia will exchange information with all participating countries CRS. As of 2024, there are more than 120 such countries, including most European countries, as well as Canada, Australia, China, Russia and others.
• A bilateral agreement or an agreement under the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters is signed for each country.

How will this affect non-residents of Georgia?

• Citizens and tax residents of countries participating in the CRS are required to declare their foreign accounts and income. If a non-resident of Georgia has an account in a Georgian bank, information about it can be transferred to the country of his tax residence.
• This helps increase transparency and reduce the opportunities for using foreign accounts for tax evasion.

Exceptions and features

• Data is exchanged only with CRS participants. If a country has not signed the agreement, the exchange with it will not be carried out.
• Information on small accounts (for example, with a balance of less than USD 1,000) may not be transferred, but this depends on the domestic legislation of each country.

Thus, Georgia's accession to the CRS enhances global tax transparency and minimizes opportunities for tax evasion through Georgian accounts.

What are the risks for Russian citizens?

At the moment, Georgia has joined the international system for the automatic exchange of tax information (CRS) under the OECD agreement and began exchanging data with other countries in 2024. However, Russia is not included in the list of jurisdictions with which Georgia carries out automatic exchange of tax information. This means that information on Russian tax residents’ accounts in Georgian banks under the CRS is not automatically transferred to the Russian Federal Tax Service.

However, Russia can still request information on specific cases through individual requests under the Convention on Mutual Administrative Assistance in Tax Matters. Despite the theoretical possibility of such an exchange, in practice its implementation is difficult due to the current geopolitical situation. Many European countries have suspended the exchange of tax information with Russia, which creates a similar expectation in relations with Georgia, although formally the obligations remain in force

Ukraine, Belarus, Israel - how does the exchange of tax information take place with these countries?

Georgia signed the CRS agreement in 2022 and began exchanging tax information from September 2024. Let's consider the exchange with the countries you are interested in:

• Ukraine — Ukraine joined the CRS in 2023, and the first exchange is scheduled for 2024. This means that information about the accounts of Ukrainian residents in Georgian banks will be transferred to the tax authorities of Ukraine. The exchange will include information about account holders, balances and transactions.
• Belarus — is not a CRS participant, so there will be no exchange with this country. Belarus has not signed the OECD CRS agreement and does not participate in the international system for the automatic exchange of tax information.
• Israel is an active CRS participant. The exchange between Georgia and Israel is possible, since both countries have signed the agreement and participate in the automatic exchange of financial account data.
• Latvia, Lithuania and Estonia — all three countries are CRS participants. Georgian banks will transfer data on tax residents of these countries to the relevant tax authorities, and vice versa. The Baltic countries actively exchange information under CRS standards with other OECD members.
• USA — The US does not participate in CRS, as it uses its own reporting standard FATCA (Foreign Account Tax Compliance Act). Accordingly, the exchange of tax information with the US under CRS is not possible, although data can be transferred under FATCA in the case of US citizens or tax residents.
• The UK is one of the countries that actively uses CRS for the automatic exchange of tax information. Georgia and the UK exchange data on tax residents, which makes account information available to both parties under this agreement.

Thus, the exchange of tax information is possible with most of the listed countries, with the exception of Belarus and the US, which either have not signed the agreement or use their own standards.