In recent years, many countries signed an agreement with the United States (FATCA) that enables automatic reporting to the US tax authorities of any Americans' financial data with foreign banks.
These agreements inspired OECD and G20 to extend this approach resulting in what we now call Common Reporting Standard – CRS.
It is an international standard that governs how tax authorities in the participating countries exchange data relating to the bank and safekeeping accounts of taxpayers.
The new standard, the automatic exchange of tax information, means global tax transparency.
The advantage for tax authorities is that they can check whether any individual in question has filed income tax return correctly on foreign bank accounts.
The disadvantage is that the exchange of data is done electronically with a risk of data theft by unauthorized parties.
