How to Use Common Reporting Standard Regulation

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How to Use Common Reporting Standard Regulation /
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Description Through the use of KYC Questionnaires that are based on the Model Competent Authority Agreement (MCAA), which provides the legal framework for the exchange of information as well as definition of the information to be transferred, Pega CLM helps Financial Institutions (located in CRS participating jurisdictions) determine their customers’ CRS (Developed in 2014 by the Organisation for Economic Co-operation and Development (OECD)) tax status.
Version as of 8.7
Application Pega Client Lifecycle Management for Financial Services
Capability/Industry Area Financial Services


Developed in 2014 by the Organisation for Economic Co-operation and Development (OECD) with the goal to fight tax evasion, the Common Reporting Standard (CRS) is a global information standard for automatically exchanging financial account information between tax authorities.

Financial institutions located in CRS participating jurisdictions must comply with the relevant CRS requirements, which aim at identifying the financial assets tax residents of a participating jurisdiction hold abroad and have them reported to the relevant local tax authorities.

CRS is also nicknamed “the FATCA for the rest of the world”.

Scope of CRS supported in CLM[edit]

CLM/KYC supports with questionnaires – one for entities and one for individuals – only the determination of the tax status of the customer, which is the steppingstone from which other CRS requirements (e.g. reporting) derive.

The questionnaires are prepared based on the Model Competent Authority Agreement (MCAA), which provides the legal framework for the exchange of information as well as it defines the information to be transferred, its transfer modalities, and the responsibilities of authorities. Country tax laws and CRS guidance may modify aspects of the onboarding and review process of customers, hence financial institutions must ensure that they are complying with all relevant local laws and CRS requirements and therefore configure the questionnaires accordingly.


Out of the box, CLM/KYC triggers the displaying of the CRS questionnaire in every customer onboarding, regardless of the products requested by the customer. This is because the majority of financial institutions prefers to have already in the customer file their relevant tax classification in case the customer then falls under the relevant CRS reporting obligations.

However, CLM/KYC can support the other approach in the market displaying the relevant CRS questionnaires only as per strictly dictated by the regulation, i.e. when the product requested falls within the definition of “financial account”.

In both approaches the financial institution that must perform the tax classification of the customer is the one located in the country where the product is booked, if that country is a CRS participating jurisdiction. However, if the onboarding financial institution is a branch located in a non-CRS participating jurisdiction but their Head office instead is, then also that branch must be CRS compliant.

How and where to configure triggers[edit]

The applicability logic for CRS questionnaires is configured in the decision table ‘TaxRegulationMasterAppliesWhen’. The two default questionnaires for CRS are ‘CRS_New_Entity_Accounts’ for legal entities and ‘CRS_IndividualNewAccounts’ for physical individuals.

Currently the decision table takes into configuration factors (as columns) like type of client (legal entity or physical individual), the KYC case type to be applied to (in the CLM application the default case type is ‘CRSCase’), jurisdiction (not applicable for CRS), risk (not applicable for CRS), etc. Finally, there is a wildcard factor named ‘Other condition’ where any other decision rule can be added. For CRS questionnaires the ‘when’ rule ‘ApplyCRSCaseWhen’ applies here. A big chunk of the decision logic is configured within there.

You will need to configure the specific CRS applicability logic for your Financial Institution in these mentioned rules.