The Foreign Account Tax Compliant Act (FATCA) is now published in its final form and we are pleased to say that Touchstone’s product development which was undertaken by us in advance of the final form regulations still meets with the requirements of the Act.
This has put our users in a good position enabling them to already identify their account holders, which assists in deciding whether they need to register with the IRS as a “compliant” foreign financial institution in July 2013.
How can our software help?
A large amount of data recorded within your system will be relevant to establish whether or not your clients or related client entities are captured under the FATCA regulations.
Interrogation of this data through reporting is the first action available to most users to help automate the identification stage required as part of FATCA.
Once you have undertaken the identification stage, you would wish to record a code against the relevant static data records, to identify whether or not they are captured under the regulations, and if they are, to confirm what classification the record would have, such as “Foreign Financial Institution”, or “Non-Foreign Financial Entity”.
What are our future plans?
Our development this year continues with phase 2, which will tackle the reporting and withholding tax elements of the regulations. Phase 2 of FATCA development has started and is scheduled to finish at the end of September, giving our users plenty of time to upgrade and test the latest version of our software for FATCA compliance purposes. During this phase, we will be engaging with our FATCA working party members to ensure that the reporting development meets the requirements of the regulations…
What have we already done?
We have completed development to enable recording of a FATCA related classification against key static data records. This allows for multiple tax types to be recorded for the clients administered, and related third parties.
A report has been developed which interrogates all relevant fields within the system to assist in the identification of third parties which may be captured under the regulations. This report is available as part of version release TWM60.07.
Currently we are working, in conjunction with our clients as a “Working Party”, to monitor, evaluate and implement the necessary enhancements within the TrustDynamics packages.
Touchstone does not purport to be tax advisors nor to be providing tax advice through the issue of this statement.