Thomson Reuters launches Fatca solution
Dubai, January 7, 2013
Thomson Reuters, the leading source of intelligent information for businesses and professionals, has launched a key solution to help institutions fulfil and comply with their obligations under the forthcoming US Foreign Account Tax Compliance Act (Fatca).
Supported with the full power of Thomson Reuters content and solutions assets from its governance, risk & compliance, and tax & accounting businesses Thomson Reuters for Fatca Solution, brings together market leading technology already widely used by organizations around the world to solve issues with regulatory compliance, tax documentation and tax reporting.
It will enable organisations to identify, maintain and validate their customer records to assist in Fatca compliance.
It is estimated that tax avoidance by US citizens and entities using offshore bank accounts and other vehicles held at foreign financial institutions (FFIs) is costing the US government around $500 billion a year.
Under the new Fatca rules, from this year, all FFIs will be required to collect, manage and report all information that could reasonably point to individual’s liability for US taxation to the Internal Revenue Service (IRS) – a process estimated to cost foreign banks, with more than 25 million accounts, at least $250 million ($10 per account) to implement, according to the European Banking Federation and the Institute of International Bankers.
“The real costs for Fatca compliance, on an individual firm basis, will vary based on the state of the client account data in question and the technology and systems framework in place to store that data,” explained Virginie O’Shea, analyst, Aite Group.
“Those with a more robust legal entity or client data management framework or anti-money laundering (AML), or Know Your Customer (KYC) assessment scheme in place are likely to be better positioned to tackle the challenge,” she stated.
According to her, the impact of Fatca will be widely felt across the financial industry with banks, investment funds, insurance companies, mutual funds, broker-dealers, custodians, intermediaries, and private equity firms all having to comply.
Fatca places significant reporting requirements on firms to identify US account holders. This will create significant operational and systemic pain points, particularly around on-boarding, classifying and documenting new clients, and in gathering sensitive data from a variety of structured and unstructured sources.
“Fatca compliance will require a multi-disciplinary approach that will touch many points across an organization,” said Laurence Kiddle, commercial director, Fatca, Thomson Reuters.
"Thomson Reuters has brought together a number of leading tried and tested technologies, spanning governance, risk, compliance, tax and accounting to enable compliance with this new direction in taxation regulation," noted Kiddle.
"This approach makes us uniquely placed to provide a full, and modular, solution that can help institutions fulfil and comply with the obligations they are under and supports every stage of the challenges they will face as a result of Fatca," he added.-TradeArabia News Service