FATCA

The Foreign Account Tax Compliance Act (FATCA)

The Foreign Account Tax Compliance Act (FATCA) is a new regulation being brought in by the United States’ IRS and Treasury. In an attempt to reduce tax evasion and bring expatriate US citizens into the tax system, the IRS is inviting financial institutions around the world to enter an agreement with them to report US citizens holding offshore accounts. Failure to comply risks the financial institution being penalised by a 30% withholding tax on all US sourced income.

Although FATCA is a simple concept, implementing a solution is a complex undertaking involving many aspects of banking technology from front to back office. Icon Solutions is well placed to provide a full range of services to help financial institutions tackle FATCA, from initial business and technology consulting to the delivery of a full FATCA solution.

We are so confident in our abilities that we have created and sponsor a separate website for FATCA (FATCAsolutions.com) aimed specifically at helping the financial services industry find answers to the questions on how to develop a FATCA solution.

We offer a comprehensive range of services for FATCA:

Legal and Business Impact

In association with the best legal and business firms in the world of commercial tax operations, we can offer unrivalled advice on the impact of FATCA on your business. Reviewing what you need to do to be compliant from a legal and accounting perspective, will reduce your overall costs and risk.

Readiness assessment

FATCA reaches into many parts of a financial institution’s business and IT systems. Understanding your own organisation’s readiness to implement FATCA is an important first step to reaching compliance in time and before penalties apply. Our consultants will work with your own business and IT management to determine the full implications of implementing FATCA, accelerating eventual programme delivery.

IT Systems Assessment

IT systems within financial institutions are complex and require high availability. Making changes to business critical systems to comply with FATCA whilst minimising disruption and maintaining good customer service requires careful design and planning. Our architects have deep financial services experience and can help you resolve these issues, reducing risk to your business operations.

Account discovery

Assessing your exposure to FATCA may be a bigger task than you think especially if your organisation has several operating divisions working across multiple legal jurisdictions. We can simplify the task by applying standard techniques to determine the number of potential US accounts you have across the globe.

Process analysis & KYC

Implementing FATCA will require changes to several of your key business processes, particularly in account opening and ‘Know Your Customer’ (KYC). Icon’s business process architects will help you engineer revised processes which are FATCA compliant using industry standard tools and methods, reducing the risk of non-compliance and penalties.

Icon has broad experience of implementing business process management (BPM) and business rules engines within some of the most demanding domains of the financial services industry.

Reporting

FATCA is ultimately a requirement to report US account to the IRS. Gathering, filtering and aggregating the information required is a larger and more demanding task than many realise. Our architects will help you create the necessary data feeds from back office accounting systems to a data store or warehouse and build a reporting engine using established commercial off the shelf components (COTS), reducing costs and delivery times.

Withholding Engine

FATCA withholding, particularly for passthru payments, is acknowledged to be the most demanding aspect of FATCA. Our expertise in payments technologies will help you build and integrate a compliant tax withholding engine with minimum impact on existing accounting and payment systems, reducing risk and cost to your business.

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