The effect of implementing FATCA provisions will go far beyond the compliance team, financial organisations are told
FATCA impact on local businesses will be significant and planning needs to start now, according to tax expert Aileen Barry of DLA Piper. Ms Barry was addressing an audience of around 50 financial services professionals at a seminar organised by local Guernsey firm Corporate Risk Solutions last week.
FATCA’s aim is to mitigate tax evasion by US citizens by compelling non-US organisations – referred to generically as Foreign Financial Institutions – to disclose information on US taxpayers to the IRS.
Ms Barry explained that the reach of the FATCA ‘net’ will incorporate a wide range of financial sectors including fiduciaries, insurance and investment. She outlined the timescales for organisations having to put suitable procedures and systems in place to satisfy FATCA reporting requirements, stressing that doing nothing is not an option. Ms Barry also detailed the wide spectrum of criteria which financial institutions will need to consider when identifying whether clients fall within the category of ‘reportable persons’ or not.
Darren Wadley, Managing Director of Corporate Risk Solutions said:
“It is very clear that there are significant business challenges on the horizon for financial organisations. Data collection and processing systems will have to be reviewed and changes in business models may potentially be needed. I think that the presentation succeeded in emphasising the need for businesses to start their planning processes now.”
Paul Mudge, Compliance Officer from Aon Insurance thought the event was time well spent:
“The presentation was extremely useful and provided me with valuable insight on how the new FATCA regulations will affect our business. Whilst I have attended one or two other events on this subject, I certainly came away with more information on FATCA than I had before.”