Articles

Gain deeper insight with articles that give our considered opinion and predictions of where the industry will go next.

FATCA Failures: Holistic compliance or just full of holes?

In the last eighteen months we’ve conducted compliance reviews in five countries on twelve Tier 2 and Tier 3 financial institutions. In this post, we unpick the strategies we have seen firms use to approach their QI and FATCA obligations, and highlight the problems we have observed when firms fail to take a holistic approach to compliance.

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Your ‘Bible’ to Compliance

The road to compliance is never ending and the IRS have certainly given us some interesting scenery to admire as we traverse the QI regulatory landscape.

In this post we discuss the importance of a living compliance program, and highlight some of the IRS announcements that need to be reflected in your policies and procedures if you want to remain fully compliant.

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Validating W-8 Forms: Cultivating an Eye for Detail

We are often asked what constitutes a consequential or an inconsequential error when validating a W-8 form. Some errors are obviously consequential, but what happens if an error appears relatively trivial, such as an incorrect date format? In this post, we explore how you can assess the risks involved and make a judgement about whether to reject or validate a W-8 form.

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I speak English, French and FATCA

Acronyms have two main uses: to facilitate efficient communication between professionals within a given discipline where the long form of technical terms would be unwieldy, and to create a barrier to communication - a secret language that you can only understand if you are within the profession. In this post, Ross McGill gives a quick guide to the acronyms of FATCA.

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GATCA: A Practical Guide to Global Anti-Tax Evasion Frameworks

TConsult's subject matter experts Ross McGill, Chris Haye and Stuart Lipo have written a new book providing a practical guide to global anti-tax evasion frameworks. In this post, Stuart describes the context for the book...

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Are FATCA’s Dissenters Tilting at Windmills?

Like Don Quixote, FATCA’s dissenters may have misidentified their enemy. So what is the problem with FATCA and what might happen if the anti-FATCA movement succeed in getting it repealed?

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The Challenges of GATCA

The global anti-tax evasion frameworks that comprise GATCA have as many commonalities as they have differences, so it makes sense to approach regulatory compliance in a holistic fashion.

In this post, we explore how smaller firms are responding to the pressures of compliance...

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FATCA Misconceptions

For some within the industry, the mere mention of ‘FATCA’ is enough to spark compliance-nightmare flashbacks.

The ever unpopular FATCA regulations have now been with us for seven years. But, despite its relative longevity, there are a surprising number of misconceptions surrounding FATCA....

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Will AEoI be the new Equifax?

What are the data security risks associated with the AEoI framework? In this post, Ross McGill explores some of the risks and issues a stark warning to the financial services industry.

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  • Argentina becomes latest jurisdiction to sign an IGA with the USA

    The latest FATCA news is that Argentina has signed a Model 1A IGA with the US. We consider what this means for Argentine financial institutions.Read more

  • The New QI Agreement 2023: What it means for you (Webinar Recording)

    A new QI Agreement is due to be released in January 2023, including new obligations for qualified intermediaries that allow their clients to own interests in publicly traded partnerships. We hosted a webinar on 8th December for financial institutions in Taiwan and Hong Kong to explain the implications of these proposed changes. Watch the recording now...Read more

  • Saudi Arabia KYC Rule Approval: What it means for you (Webinar Recording)

    Saudi Arabia’s KYC rules were approved by the IRS earlier this year, which means that all Saudi Arabian financial institutions are now eligible to apply for QI status. We hosted a webinar on 30th November for financial institutions in Saudi Arabia to explain the benefits of becoming a QI. Watch the recording now...Read more

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    DTC 1042-S 公告

    DTC最近推出名為1042-S公告 (1042-S Announcement) 的新服務。此為為專稿,提供我們對新服務影響的個人解讀。此文內容非稅務、法務或投資建議。僅為作者本人表達之觀點。 解決的問題是 目前,當某些類型的美國發行公司進行配息時,有些配息可能被分類為股息,根據美國稅法,股息必須預扣與申報的。當之後取得資訊時,可能會發生該配息實際上不應被歸類為股息的情況。因此,有兩個人工作業程序必須由非美國金融機構進行,無論是#QI還是#NQI。第一個是退還多扣的稅款。第二個是修正之前已經被申報為股息的1042-S申報資訊。對於新的DTC通知所涵蓋的證券類型,配息的正確分類資訊將在支付日期之前提供。這代表對金融機構而言,將不再需要重新分類、退款或修正1042-S申報。 現今會發生什麼事? 重分類最常發生於美國共同基金和美國不動產投資信託(REITS)。這些類型的美國發行公司有時會將原本發放(扣稅與申報)為股息的所得重分類為,例如:資本報酬。當一個非美國金融機構發現這些情況時,通常是下一個美國稅務年度的幾個月,且通常是在他們已經向IRS提交1042-S申報資料(申報配息為股息)之後。所以,除了退款給他們的客戶之外,他們現在還必須向IRS提交修正的1042-S申報,並向受到此變更影響的任一客戶發放接收副本。 因為美國的申報系統是一連串逐層上報,支付鏈的每個金融機構都必須修改其申報,否則將面臨來自IRS的罰款通知。例如:一家擁有直接客戶(個人或實體)的QI可能須要修改減少總額和預扣稅額的集合1042-S,而修改另一個增加相同金額總額但保留該集合預扣稅額為0的1042-S。如果他們的客戶是其他金融機構,他們會單獨被申報,所以QI也必須修正特定IRS 1042-S,並向他們的客戶發送接收副本,通知他們這些變更,以便客戶能進行相同流程…以此類推到支付鏈下游。 DTC服務代表什麼? DTC指出重分類也會發生在某些指數型基金(ETF),當類似股息的配息收入被重新分類為與利息相關的股息的時候。股息通常適用於預扣稅,而與利息相關的股息則不適用,因為他們屬於投資組合利息豁免的定義範圍。 共同基金或REITS的重分類跟ETF的重分類差別在於,對ETF而言,資訊是可取得的但以前沒有公布,而共同基金和REITS的重分類是發行公司在稅務年度結束後才決定。藉由提供有關這些ETF收入正確分類的紀錄日期資訊,不須進行退款和修正申報程序。 將產生什麼影響? DTC服務是新的且目前範圍相當有限,但我們可以預期將會增加。對非美國金融機構的影響將與客戶交易這些特定ETF的規模和範圍成正比。採用率將是關鍵。沒有被列入DTC服務所涵蓋的ETF將面臨人工重分類的流程。因此,隨著這項服務的發展,密切關注這項服務納入的ETF數量將非常重要。 如果DTC通知被參與DTC的美國預扣上手(USWAs)或預扣式QI(WQIs)所採用。退款的數量與修正1042-S的數量應該會下降。然而,整體而言,因為重分類的原因各不相同,金融機構將無法用自動化完全取代他們的人工作業流程。然而,這是朝正確方向邁出的一步。 如果您已經有處理重分類的政策與流程,則不會有影響。據我們所了解,接受DTC 1042-S公告服務的ETF將有效地將這些配息歸類為投資組合利息。由於業界使用的大多數預扣聲明書已經允許對稅率集合帳戶中的投資組合利息配息按0%課稅,因此對作業的直接影響很小。然而,重要的是,金融機構要意識到正在發生的事情,並確保他們的系統能夠處理這類型的收入配息。 下一步是什麼? 除了有希望將DTC 1042-S公告的使用範圍擴大到更多的ETF之外,DTC在其SEC申報規則變更文件中提到,使用該系統來處理1446(f)配息與871(m)。1446(f)的影響將允許DTC處理包含多個配置成份的單一配息,以達到預扣與申報目的。 若您想了解更多,請造訪TConsult網站或聯絡我們([email protected])Read more

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    DTC 1042-S Announcements

    The DTC has recently launched a new service called the 1042-S Announcement service. This article is an opinion editorial (op-ed) providing our personal interpretation of the impact of the new service. Read more

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    Periodic Review and Certification: QIs in Taiwan Take Note

    Many financial institutions in Taiwan became qualified intermediaries in 2018 and 2019 and are now approaching their first periodic review. Find out what you need to consider when selecting a reviewer…Read more

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    台灣的合格中介機構(QI)定審與認證必需注意的事項

    為了與國際金融機構接軌,越來越多的台灣金融機構,尤其是證券商,在2018年及2019年間向美國國稅局(IRS)申請QI資格。重要的是要記住,一旦成為QI並享有QI的好處,就必須履行QI義務。 QI合約規定,必須每三年向IRS認證您的合規性。要做到這點,首先您必須做一次定審。如果您在2018年成為QI,您必須在2022年完成一次定審,如此才能在2022年12月31日前完成IRS認證。如果您在2019年成為QI,則必須在2013年7月前完成一次定審。 定審代表您必須指派一位獨立且有能力的顧問,檢查您履行所有QI義務。規則非常複雜,且您不能用既有的顧問來做定審。 定審必須是獨立的 QI合約規定,查核人員必須具有充分獨立性來進行審查,且不能由「同一顧問公司」的任何人員來審查。因此,QI定審與認證其中一個原則是,RO必需知道查核人員是「獨立的」。如果他們之前已經有請顧問協助任何QI相關事務,例如:QI申請與合規計畫建立,IRS說他們的顧問「不是」獨立的。如此一來QI不能使用他們原本的顧問做為查核人員。這代表RO必需找一位獨立的人檢查QI是否徹底遵循他們的義務。 查核人員必須是有能力的 查核人員必須測試QI的帳戶,以確保他們正確地記錄客戶,而且文件是有效的、正確地預扣稅款,並對FATCA與QI正確地申報。對大多數金融機構而言,由他們內部稽核人員進行定審並不容易,因為他們對美國預扣稅合規的知識不足也不夠有經驗。所以,大多數QI仰賴外部稽核或第三方顧問。然而,台灣大部份的金融機構也使用第三方顧問來協助他們日常的QI合規工作,這意味著他們的顧問公司不能擔任定審的查核人員,因為他們不具獨立性。 尋找獨立的專家 不要認為定審和認證是簡單的例行公事。如果QI準備不充分或查核不準確,QI可能會受到IRS裁罰。TConsult Ltd被19個國家的客戶,包含台灣與亞洲的許多金融機構聘用為稅務專家,最重要的是我們具有獨立性。如果您想了解與規劃如何進行QI定審與認證,請與我們聯繫([email protected])。Read more

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    Are AML and CFT Based Practices for Validation of Tax Residency Inadequate for AEoI CRS Purposes?

    Marco Zawar shares his views on why Anti Money Laundering and Counter Financing of Terrorsism related due diligence measures in Hong Kong are insufficient to meet financial institutions’ AML/KYC requirements under AEoI/CRS…Read more

  • Four things you need to know in the US tax reporting season

    1042-S U.S. tax reporting season is upon us, so we are sharing our top tips based on the problems we see in the market. Find out how to ensure your reporting goes smoothly in 2022…Read more