Financial institutions, such as Payhawk, are required to report certain financial information to tax authorities under the OECD's Common Reporting Standard (CRS) and the U.S. Foreign Account Tax Compliance Act (FATCA). These rules increase transparency and help reduce tax evasion.
Under CRS, entities generally fall into one of the following categories:
Financial institution
Active Non‑Financial Entity (Active NFE)
Passive Non‑Financial Entity (Passive NFE)
Under FATCA terminology, Non‑Financial Foreign Entity (NFFE)
CRS/FATCA entity categories
Using the correct classification helps ensure compliance with international reporting standards. The table below outlines each CRS/FATCA entity category.
Category | Plain‑English description | Simple examples |
Financial institution | An entity that holds, manages, or invests financial assets for others. | Banks, investment funds, custodians, or life insurance companies. |
Active NFE | A business actively engaged in trade or services, earning mostly non‑investment income. | Manufacturers, retailers, publicly listed companies, or nonprofit organizations. |
Passive NFE | An entity that mainly earns investment (passive) income such as interest, dividends, or rent. | Holding companies or property‑renting SPVs. |
NFFE | FATCA term for an entity that is not a financial institution. Broadly mirrors the NFE concept used in CRS. | Same examples as Active/Passive NFEs but under U.S. rules. |
Tax Identification Numbers (TINs)
A Tax Identification Number (TIN) is a unique combination of letters or numbers that your local tax authority issues to identify you or your company for tax purposes (for example, a VAT registration number, EIN, or Company Tax ID).
Why Payhawk requires TINs
CRS and FATCA require financial institutions to include the TIN for each jurisdiction where an account holder is tax‑resident. Supplying your TIN allows tax authorities to match information accurately and avoids follow‑up requests or reporting delays.
If a valid TIN is not provided, additional documentation or explanations may be required, which can slow down onboarding or payments.
Where to find your TIN
You can look up the format and issuing authority for your country on the OECD's official portal.