Regulatory tax reporting solution
In light of regulations such as the Automatic Exchange of Information (AEoI) based on the OECD’s Common Reporting Standard (CRS), the Foreign Account Tax Compliance Act (FATCA) and its Intergovernmental Agreements (IGA1 and IGA2) or TRACE (Treaty Relief and Compliance Enhancement), financial institutions are facing the major challenge of having to fulfill the tax authorities’ constantly changing requirements concerning reporting standards. This often requires modifications in electronic data and reports. To address this demanding challenge, we have developed FiTAX, a standard software solution for financial institutions to generate tax reports for tax authorities around the world. The reporting software fulfills the requirements of the CRS, FATCA and the Intergovernmental Agreements (IGA), QI, QDD, TRACE and DAC6/MDR regimes.
More than 80 of the most important financial corporations, represented by more than 3,200 financial companies in 140 countries, use FiTAX as their main solution for tax reporting. This puts them in the position to automate their regulatory reporting processes and to produce and send tax reports from a single platform. The software also includes integrity checks to guarantee the correctness of reports.
FiTAX is already the market leading software for tax reporting in Switzerland, Luxembourg and France and striving to grow further in the Americas, Europe and Asia.
FiTAX is a standardized, ready-to-use tax reporting software that meets the reporting requirements of QI, QDD / 871(m), FATCA, CRS/AEOI, TRACE and DAC6 /MDR reporting. It enables financial institutions to fulfill tax reporting duties in more than 140 countries. For each country, the local guidance, specific rules, reporting formats and reporting deadlines are analyzed. FiTAX is constantly updated in accordance with the ever-changing tax laws and tax reporting requirements from tax authorities, so financial institutions do not have to focus on monitoring and implementing changes but can instead focus on their core activities. With 20 years of experience in the development of tax reporting solutions, we offer with FiTAX a tried-and-tested, market-leading tax reporting software solution.
The close collaboration with tax authorities and our long-term partnership with a Big 4 firm, which provides assistance with all reporting topics and advice on how to interpret tax laws in order to implement the necessary reports/features, is a clear benefit for our customers.
The module “Encrypt & Submit” enables a direct upload of encrypted report files onto the tax authorities’ portals.
We interact with our FiTAX clients at various events (for example, seminars and webinars), which provides a platform to share knowledge and experience.
In order to eliminate tax avoidance and to maximize efficiency by allowing tax authorities to access information on their clients’ assets and incomes, the OECD (Organisation for Economic Cooperation and Development) has introduced a standard for the Automatic Exchange of Information (AEoI): the Common Reporting Standard (CRS). It has been implemented in more than 100 countries since 2017.
In March 2018, the OECD released the Model Mandatory Disclosure Rules (MDR) for CRS Avoidance Arrangements and Opaque Offshore Structures. In June 2018 followed an EU directive on Mandatory Disclosure Rules for intermediaries (DAC 6). The goal of the DAC6 / MDR regulations is to provide tax authorities with information on potentially aggressive tax arrangements.
According to FATCA, the US regulation in effect since 2014 stipulates that all foreign (non-U.S.) financial institutions (FFIs) are obliged to report on the foreign assets held by Americans to the IRS or to local authorities. The reporting model depends on the agreement signed between a country and the IRS.
Launched in 2001, the QI agreement was introduced to fight tax avoidance. Qualified Intermediaries are responsible for properly filling in the appropriate tax forms for payees. QI reporting must be done following the rules of the IRS (Internal Revenue Service) for forms and electronic files, according to criteria such as payment type, tax rate and client type.
TRACE (Tax Relief and Compliance Enhancement) is an initiative from the OECD that aims at allowing the claiming of withholding tax relief at source on portfolio investments and removing the administrative barriers that affect the ability of portfolio investors to effectively claim the reduced rates of withholding tax.
FiTAX has been awarded in the category “Outstanding Project – Tax Reporting” at the Regulation Asia Awards for Excellence in Singapore, following the award for “Best Solution in Tax Reporting”. The Awards for Excellence recognize technology companies, legal and consulting firms, and exchanges that have shaped the regulatory landscape in Asia Pacific, as well as outstanding technology projects both in mature and emerging markets by large tech firms and innovative startups that help to meet the requirements of a specific regulatory change infrastructure.
FiTAX has been designed on a three-tier architecture and features a user-friendly, powerful and multilingual web-based interface. FiTAX offers individual standard tax reporting modules that can be flexibly adapted to individual requirements for a tailored and optimized reporting process. Each FiTAX module can be used independently. In order to ease the implementation, all reporting modules share the same user web interface, IT infrastructure, access rights management and data.
Thanks to its strong scalability, FiTAX can be efficiently implemented in small and medium-sized financial institutions as well as in large financial groups. We offer a fast and straightforward deployment of the software and exceptional assistance on all FiTAX-related topics through our experts.
Along with its new technology, the interface brings added value to FiTAX users: KPI dashboard, calendar deadlines, updated centralized user interfaces to ease release deployment as well as add-ons and upgrades on multiple databases.
The CRS module helps financial institutions across the world to comply with OECD and local requirements on tax reporting under the Automatic Exchange of Information (AEOI).
The DAC6/MDR module is for intermediaries (banks, trustees, asset managers, financial advisors) to meet the new Mandatory Disclosure Rules to comply with DAC6/MDR obligations. Our standardized solution is ready to use, easy to deploy and can be customized to specific needs.
The FATCA module helps financial institutions to cover both the generic and the country-specific FATCA reporting requirements in accordance with the intergovernmental agreements signed with the United States.
The QI module helps Qualified Intermediaries to prepare and send complete QI reports to the IRS (Internal Revenue Service). It also helps to perform the reconciliation with the custodian needed by banks with primary or secondary QI status regarding US source income paid by American citizens (1099 form) as well as non-resident aliens (1042/1042-S form). FiTAX also covers the QDD/871(m) agreement.
The TRACE module helps Authorized Intermediaries to prepare and send complete reports to the tax administration. The TRACE regime requires Financial Intermediaries (so-called Authorized Intermediaries or AI) to report to the issuer country the detailed information about income they pay to downstream agents or beneficial owners. Our module provides support for the reporting requirements imposed the TRACE regime, the software also includes a powerful reconciliation feature and client reporting capabilities.
All FiTAX modules follow the same principles and enable tax reporting in the respective national language and currency. FiTAX offers a wide range of additional software features, such as:
BearingPoint’s coverage and accuracy were key differentiators in our decision to select FiTAX. Attention to detail on the technical reporting requirements, combined with business and implementation expertise, has enabled a smooth integration of FiTAX into our systems and processes thus far.
Tom Pryce, Head of Client Tax Information Reporting at Standard Chartered / July 2018
The risks of noncompliance with tax reporting obligations under such regimes as FATCA are too great for financial institutions to ignore. Yet, compliance can be operationally burdensome and costly without the right tools in place. With FiTAX, BearingPoint has managed to automate the reporting process and reliably ensure the solution is always kept up-to-date with new regulatory requirements, removing many of the pain points for banks in their reporting obligations.
Brad Maclean, Co-founder and Executive Chairman at Regulation Asia / November 2018