CRS, automatic exchange of information and new asset transparency

The geography of capital is increasingly accompanied by the geography of information. Bank accounts, financial investments, shareholdings, and international wealth structures are now embedded in a system of growing cooperation between tax administrations. The Common Reporting Standard (CRS) has helped transform the relationship between taxpayers, intermediaries, and states, making the automatic circulation of certain financial information standard. However, transparency does not eliminate the legal complexity of international wealth. On the contrary, it makes its contradictions more evident. For international investors, entrepreneurs, and families, information governance thus becomes an integral part of wealth governance.

The economic phenomenon

For a long time, the international localization of assets was accompanied by significant fragmentation of information.

A person could hold bank accounts in Switzerland, company shares in Luxembourg, real estate in Italy, and financial investments through structures located in other jurisdictions. Each jurisdiction had different tools for assessing and verifying a taxpayer's financial situation, while cooperation between tax administrations often required specific initiatives.

The progressive internationalization of assets has made this model increasingly unsustainable.

The mobility of people, the growth of cross-border investments, and the spread of international corporate and wealth structures have widened the gap between an individual's place of tax residence and the place where their assets are held or managed.

At the same time, Member States have progressively strengthened their administrative cooperation instruments, developing mechanisms for the automatic exchange of financial information.

The Common Reporting Standard, developed by the OECD in 2014, represents one of the main results of this transformation.

The principle is relatively simple: certain financial institutions collect information on relationships attributable to individuals tax resident in other jurisdictions and communicate it to their own tax authorities, so that it can be transmitted to the relevant states in accordance with applicable agreements.

International tax control is thus moving from a model primarily based on individual information searches to a system in which a significant portion of financial data is acquired through periodic and standardized flows.

This does not mean that states automatically know the entire assets of every taxpayer. The CRS covers specific categories of relationships, individuals, and information, according to defined rules and limits.

The change, however, is structural.

Banking confidentiality can no longer be considered, in participating jurisdictions, as a factor capable of routinely impeding the circulation of fiscally relevant information.

This does not equate to a breach of the legitimate protection of personal privacy. The information exchanged remains subject to rules of confidentiality, data protection, and use for permitted purposes.

Rather, the relationship between financial privacy and fiscal sovereignty has changed.

Competition between jurisdictions is also affected. The attractiveness of a jurisdiction for international investors and assets depends less and less on the ability to retain information outside of tax cooperation and more and more on institutional stability, legal certainty, the quality of financial services, and the reliability of the professional infrastructure.

The legal and fiscal framework

The CRS is an international standard for the automatic exchange of financial account information.

In the European Union, Directive 2014/107/EU, generally referred to as DAC2, transposed its principles into the field of tax administrative cooperation. In Italy, the legislation is implemented, among other things, by Law No. 95 of 18 June 2015 and the Ministerial Decree of 28 December 2015, as subsequently amended.

The system assigns specific reporting obligations to financial intermediaries to identify and verify the tax status of account holders.

Self-certification of tax residency, commonly required when opening or updating a banking account, is one of the tools used to collect the necessary information.

Depending on the category of the relationship and the data subject, the reportable information may include identification data, tax residence, tax identification number, account number, balance or value of the relationship, and certain income or financial proceeds.

Communication occurs according to standardized procedures and concerns the jurisdictions for which the agreements and conditions provided for by the applicable legislation exist.

A particular complexity arises when the holder of the relationship is not a natural person, but a company, a holding company, a trust or another financial entity.

The CRS, in fact, distinguishes between financial institutions, active non-financial entities and passive non-financial entities, providing for different identification and communication rules.

For passive entities, the natural persons who exercise control over them, the so-called controlling persons , may also be relevant.

In the case of trusts, the classification must consider the actual structure, the functions performed, and the role of the parties involved. The settlor, trustee, protector, and beneficiaries may be relevant for information purposes according to the specific applicable rules.

Not every trust is automatically subject to the same communications, just as not every beneficiary is necessarily reported under the same conditions.

This aspect is important because the qualification for CRS purposes does not necessarily coincide with that relevant for income taxation, inheritance tax, or for identifying tax residence.

The same capital structure can take on different qualifications depending on the discipline considered.

Regulatory evolution has not stopped at traditional financial relationships.

The OECD has updated the CRS standard, expanding and refining its scope, and developed the Crypto-Asset Reporting Framework (CARF), intended for the automatic exchange of information relating to certain transactions in crypto-assets.

In the European Union, Directive (EU) 2023/2226, known as DAC8 and implemented in Italy by Legislative Decree No. 194 of 10 December 2025, further expanded the cooperation system. The new provisions on crypto-assets will apply from 2026, with the first exchanges related to that year expected in 2027.

This is an evolution consistent with the progressive digitalization of wealth.

CRS, CARF, and DAC8, however, should not be confused with the US FATCA system or anti-money laundering obligations. These instruments have partially convergent purposes, but different prerequisites, recipients, and mechanisms.

Finally, it is necessary to distinguish the communication of information from its tax qualification.

The presence of a foreign account reported through the CRS does not, in itself, demonstrate the existence of undeclared income.

Similarly, a financial balance does not necessarily coincide with taxable income.

For taxpayers resident in Italy, the obligations to monitor foreign assets, fulfilled through the RW form or the corresponding applicable reporting form, must be assessed according to separate regulations, as must any obligations relating to IVIE, IVAFE, and the tax on crypto-assets.

Financial data constitutes information. Its tax relevance requires legal qualification.

Implications for investors and wealth

For a family with assets distributed across multiple jurisdictions, international tax transparency introduces a new requirement: ensuring consistency in the information describing the assets.

Consider an entrepreneur who transfers his tax residence abroad, maintaining bank accounts, company shares, and investments in Italy and other countries.

The transfer may be entirely legitimate. However, the tax status declared to intermediaries must be consistent with the actual residence, applicable reporting requirements, and the documentation representing the asset organization.

An outdated bank self-certification, an incorrect tax classification, or a mismatch between data reported by multiple intermediaries can generate seemingly contradictory information.

These aren't necessarily violations. However, these inconsistencies may require clarification and documentary reconstruction.

The issue becomes even more complex in international corporate structures.

A holding company may hold operating interests, financial portfolios, and banking relationships in multiple jurisdictions. For CRS purposes, it is necessary to verify their correct classification and, where applicable, identify the controlling persons.

This classification, however, does not automatically determine the tax residence of the holding company nor resolve questions relating to its effective management.

Information transparency complements the substantive evaluation of the structure, without replacing it.

The same problem arises in trusts and structures intended for the generational transmission of wealth.

The distinction between settlor, trustee, and beneficiaries may be legally correct, but must be adequately represented in the information provided to intermediaries, according to the applicable legislation.

A trust may be fully valid under civil law and still require careful analysis of its tax classification and reporting requirements.

The increasing circulation of data also makes coordination between the professionals involved more important.

A private banker may have access to the financial relationships entrusted to their intermediary, but not necessarily the client's entire corporate structure or succession. Accountants may have access to tax returns, but may not have complete visibility of foreign asset vehicles. Trustees may manage certain assets without participating in decisions regarding the remaining family assets.

None of these situations, in and of themselves, imply an irregularity.

The problem arises when there is a lack of a comprehensive representation capable of connecting information and qualifications from different subjects.

An estate may be correctly structured from a legal perspective, but be difficult to reconstruct if there is no coordination between ownership, control, tax residency, banking documentation, and reporting obligations.

In this scenario, transparency does not only concern the relationship between taxpayers and the tax administration.

It becomes a question of wealth organization.

Strategic perspectives

The increasing availability of financial information requires an evolution in the wealth planning approach.

It is no longer sufficient to separately verify the regularity of individual relationships or individual structures.

We need to rebuild our heritage as a system.

The first step consists of mapping the assets and the parties involved : individuals, companies, holding companies, trusts, foundations, banking relationships, financial investments, real estate, and shareholdings.

For each component, the legal ownership, any economic beneficiaries, the entities exercising decision-making powers, and the jurisdictions involved must be identified.

The second step concerns the consistency of information .

The tax residency declared to banks must be verified against the entity's actual situation. CRS classifications must be consistent with the entity's characteristics. Information relating to financial relationships must be reconcilable with corporate and tax documentation, taking into account the different purposes of the applicable regulations.

The third element is professional coordination .

Legal advisors, tax advisors, bankers, trustees, and family offices must be able to work based on a shared understanding of the assets, while respecting client confidentiality and authorizations.

This doesn't mean centralizing every function under a single point of contact. It means preventing each professional from operating with a partial representation, potentially incompatible with that used by others.

Finally, periodic review is necessary.

Transfers of residence, successions, changes in corporate structure, new shareholdings, distributions from trusts, or the opening of financial relationships may alter disclosure and reporting obligations.

A classification that is accurate when a report is opened may require updates as circumstances change.

Asset governance must therefore also include the management, updating, and reconciliation of information.

This approach introduces an important distinction.

The regularity of individual obligations remains necessary, but it does not in itself guarantee the coherence of the entire capital structure.

Increasing transparency doesn't diminish the value of planning. It increases its accountability.

Conclusion

The transformation of international taxation does not consist only in the greater ability of states to acquire information on assets held abroad.

The most profound change concerns the progressive overcoming of a model in which the geographical distribution of assets could coincide with a fragmentation of available information.

Today, people, capital, and wealth structures remain distributed across multiple jurisdictions, but information about them circulates through increasingly complex systems of cooperation.

This doesn't eliminate the complexity of international assets. Rather, it makes it essential to represent them correctly.

For international investors, entrepreneurs, and families, asset protection requires not only adequate legal structures, but also consistent information, proper qualifications, and a management team capable of coordinating individuals, assets, and jurisdictions.

Tax transparency doesn't eliminate financial complexity. It makes it visible.

And information governance is now part of asset governance.

Trust

About the Author

Edoardo Tamagnone is a lawyer and partner at the law firm Tamagnone Di Marco Avvocati Associati . He focuses on international taxation, investment structures, and wealth planning for investors, family offices, and businesses with cross-border operations.

He works between Turin and international contexts, focusing on the intersection of law, economics, and global capital.