Foreign Account Tax Compliance Act (FATCA)
Reducing the burden of complying with taxpayer data exchange requirements
AxiomSL’s solution provides the data aggregation, data quality and reporting functionality market participants need to comply with FATCA and all other taxpayer data exchange regulations, including the global Automatic Exchange of Information (AEI) program and ‘UK FATCA’.
FATCA (Foreign Account Tax Compliance Act) requires all Foreign Financial Institutions (FFIs) to provide information about their US clients to the IRS in accordance with the terms of an agreement (FFI Agreement) entered into by the FFI and the IRS. If an FFI does not enter into an FFI Agreement with the IRS, it will be deemed to be a non-FATCA compliant FFI and a 30% withholding tax charge will be applied to certain payments.
The definition of FFIs is broad as it includes not only banks, insurance companies and broker-dealers but extends to clearing organizations, trust companies, hedge funds, private equity funds, property funds and pension funds. It also includes securitization vehicles and other investment vehicles. Intergovernmental Agreements (IGAs) will also be enforced between the USA and countries/jurisdictions around the world to improve international tax compliance and implement FATCA.
The key challenge for FFIs lies in the complexity of implementing a process for on-going identification of US citizens and residents as well as monitoring that appropriate information is obtained to confirm tax status within a stringent timeframe. Many FFIs are struggling to figure out how they will consolidate the data and operations between disparate systems to support the emerging requirements. AxiomSL’s FATCA solution ensures that financial institutions can consolidate FATCA-relevant information from any data source across different systems and multiple countries to successfully deliver a centralized FATCA-relevant compliance and reporting platform.
The challenges facing market participants do not stop with FATCA. Countries around the world are now introducing their own versions of the US regulation. The most significant of these is the AEI program which will see G20 nations exchange data about taxpayers from 2017 onwards. The initiative has been dubbed ‘GATCA’ (or Global FATCA) due to its wide-ranging impact. Other measures include ‘UK FATCA’, which will involve British Overseas Territories and Crown Dependencies, including Jersey, Guernsey and the Cayman Islands, sharing taxpayer data with the UK from May 2016.
AxiomSL’s Solution Meets Compliance Demands
AxiomSL, global leader in regulatory compliance and risk management solutions for over 20 years, provides a data-driven platform, which empowers financial institutions to meet all FATCA’s compliance and reporting requirements.
AxiomSL’s data management framework scopes, maps and aggregates FATCA-relevant information on a single data repository.
This strategic data driven approach monitors internal data information, streamlines controls & processes and provides the foundation for evolving regulations. This integrated solution addresses FATCA’s disclosure requirements in the area of traceability, transparency and tax administration and filing.
The centralization of data on a single repository platform and the automation of the compliance process deliver a simple, cost effective and scalable solution, which enables FFIs to consolidate, aggregate, monitor, audit and validate data from all client records across multiple systems and locations.
AxiomSL’s integrated solution, fast and easy to install at the core of your system without any data conversion, allows financial institutions to readily become FATCA compliant with a full audit trail ensuring traceability of every process.
- Empowers FFIs with a FATCA Compliance and Reporting platform, which meets the full scope of FATCA disclosure requirements and ensures ongoing compliance
- Provides FFIs with a framework to consolidate, aggregate and filter clients’ records to report in accordance with IGA/Form 8966 requirements
- Delivers single FATCA repository platform which centralizes all clients’ information from disparate sources across the world and seamlessly adapts to evolving regulations
- Provides FFIs with an entire compliance and reporting platform; removes manual process, redundant activities and reduces operational cost.
- Centralizes all FATCA-relevant data information from disparate systems and across multiple jurisdictions on a single data repository;
- Enables FFIs to scope, map and aggregate all FATCA information on a single platform;
- Enables FFIs to address data quality and data integrity issues (ability to obtain transactional and client reference data granularity;
- Enables FFIs to monitor US and recalcitrant FATCA account data collection process;
- Delivers dynamic data management with robust data modeling and full interoperability with FFI’s
- Allows FFIs to filter FATCA relevant information based on IGA/Form 8966 regulations;
- Allows FFIs to report in accordance with IGA/Form 8966 requirements;
- Integrates easily in complex environments and interfaces with FFIs’ systems; thus, eliminating the need for expensive customized programming;
- Enables FFIs to automate the process to become FATCA compliant and adapt to new
- Removes manual workarounds, vendor dependency, redundant activities and reduces
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