Popular Revolut app now collecting users’ tax information

The digital banking alternative Revolut has started requesting users of its mobile phone app to provide their tax residence details and taxpayer identification numbers, leaving clients wondering whether their transactions will be transmitted to the Maltese authorities.

The answer is simply, yes.

The OECD’s CRS (Common Reporting Standard) and the American FATCA (Foreign Account Tax Compliance Act) are the standards of reference which regulate financial institutions.

Now Revolut is required to obtain self-certification from customers on also their residencies, and a taxpayer identification number (TIN) with respect to each tax residency.

The popular Revolut app includes a pre-paid debit card from MasterCard or VISA, and provides users with currency exchange, cryptocurrency exchange and peer-to-peer payments.

Since launching its services in Malta in September 2018, over 190,000 have signed up to the service, making Malta the country with the company’s biggest market penetration yet. As of February, customers are also able to upgrade to Revolut Bank for secured deposits.

Like all other financial institutions, Revolut is now required by law to collect and report information on clients’ tax residencies and account balances under the OECD’s Standard for Automatic Exchange of Financial Account Information, an international consensus on automatic exchange of tax information.

One is typically considered a tax resident in countries where they pay taxes or are physically present for at least six months of a year. The TIN in the case of Malta is the I.D. number.

But while Revolut’s banking licence is issued in Lithuania, where it is headquartered, it is the country’s tax authoriyty that is responsible for transmitting the tax data collected by Revolut to other national authorities.

“CRS and FATCA standards apply to all fintech providers and Revolut has to show it takes its responsibilities as a licensed bank seriously, if it is to avoid attracting undue audit and supervisory attention,” a financial analyst told MaltaToday.

Recently valued at €5.5 billion, the company will have money-laundering reporting officers in place, as per EU regulations, to comply with banking regulations and to establish itself as a trustworthy alternative to fiat banking institutions.

It also means a higher level of supervisory intrusion into a previously-seamless experience for so many Revolut users. Because the first time a hefty sum is deposited into a Revolut account – as little as €2,500 – the account is locked while ‘under review’, and inundated with a plethora of requests for proof of income, payslips, VAT returns, parents’ bank statements, and proof of residence.

Whether this level of supervision turns away long-term customers or not, the due diligence intrusion will become the norm the more people use fintech services like Revolut. It is the only way such fintech companies have to protect against money laundering and criminal activity financing terrorism. To the man on the street, it will be up to Revolut to make the experience more palatable for its customers.