SIX Financial Information gets ready for FATCA
Switzerland’s SIX Financial Information is now providing FATCA tax information to the IRS
Switzerland’s SIX Financial Information has begun delivering FATCA tax information to the US Inland Revenue Service, ahead of the controversial extraterritorial tax’s reporting deadline in July.
Under FATCA, banks are required to report details of any US customers to the IRS so that they can be properly assessed for tax. The rules include an obligation for financial institutions to screen their electronic account data for indicia (indicators) suggesting whether a client might have a responsibility to pay taxes according to any agreement with a relevant nation. Such information could include citizenship or residency status, birthplace, correspondence address or telephone number.
SIX will identify relevant instruments and classify them depending on whether they are affected by FATCA, exempt in the short-term, or exempt grandfathered. SIX will then monitor the grandfathered instruments for changes to ensure compliance.
“While the initial flagging of FATCA instrument status is clearly a big step toward compliance, the true benefit for our clients will be realised in the long-run as we provide automatic updates on material modifications,” said Dirk Sebald, head of product management and marketing at SIX Financial Information. “We have the processes and systems in place to recognise and transmit when a grandfathering status has changed, and tracking those changes is arguably the most challenging aspect of ongoing FATCA compliance.
The deadline to provide customer details to the IRS was originally February 2014, but in July last year it was pushed back six months, to July 2014. The delay was attributed by the US Treasury to the need to allow more time for banks to comply – and to allow time for more deals to be reached with foreign governments over sharing tax details. The UK government is currently working towards its own version of FATCA, which will encompass the overseas territories of the UK such as the Cayman Islands and the Falklands.
In addition to data on instrument level, SIX plans to incorporate the Global Intermediary Identification Number – the IRS identifier for participating foreign financial institutions. GIINs will be linked to SIX’s Valordata Feed issuer data when published by the IRS, expected in June 2014. The GIINs will be cross-referenced with other identifiers such as the LEI in SIX’s database of global securities and issuer data.
