Local businesses need to make sure they are prepared ahead of the 30 June reporting deadline or risk penalties for non-compliance, delegates heard at a recent EY tax transparency update seminar.
EY Senior Tax Manager Lisa McCleane, one of the speakers, looked at the impact of the OECD’s recently released FAQs. “The FAQs have provided clarity around some areas of concern, including confirmation that the FATCA IGA Investment Entity definition should not be used for CRS classification purposes.
“However, there are still many areas, particularly around aspects relating to trusts, which have still not been fully addressed. We are hoping for further clarification and updates to the trust section of the OECD Implementation Handbook over the coming months.”
She said staff must be trained appropriately in FATCA and CRS. “It’s also important to have on-boarding processes in place to ensure the required information is collected, with validation and reasonableness check procedures carried out and documented. If these foundations are not correctly set, this can lead to significant data protection and reputational risks for your business.”
The seminar highlighted key areas of risk and the need for businesses to have robust procedures in place to deal with them:
• Reporting incorrect or incomplete information
• Leaving registration on local tax authority too late
• Not understanding local requirements
Wendy Martin, EY Partner and Head of Tax in the Channel Islands, another speaker at the event, highlighted the importance of seeking advice and documenting policies and procedures.
“Remember that the Common Reporting Standard is not so common. Changes are still being released by local governments, which can very easily be missed. It’s important to seek local advice when reporting in other jurisdictions,” she said.
An example of this is the UK and Guernsey requirement to register each trustee documented trust within a consolidated return – no such registration is required in Jersey.
“It is crucial that all reporting processes and internal procedures are documented in time for risk audits, which are expected to commence in the near future. Jersey tax authorities will be auditing compliance with due diligence deadlines soon and while the Guernsey tax authorities are yet to confirm, they are likely to follow suit,” added Martin.