The importance of FATCA regulation for the BFS industry
It has been estimated that the U.S. Treasury loses as much as $100 billion annually to offshore tax non-compliance. To address this vital issue, the US congress enacted Foreign Account Tax Compliance Act (FATCA) to recoup their federal tax revenues and to make sure having stringent guidelines for the U.S. taxpayers so that they find it almost impossible to conceal their assets held in their offshore accounts. As a part of FATCA compliance, United States persons including individuals (who live outside the United States) and foreign financial institutions need to report their financial accounts related to American business to the US Internal Revenue Service (US IRS) department. In addition, FATCA also requires foreign financial institutions to report information related to the ownership of U.S. persons on assets held overseas. FATCA has been designed to increase compliance rather than to enforce collection from foreigners.
In order to make the processes compliant to FATCA, financial institutions are looking to partner with organizations with demonstrated experience and extensive knowledge on FATCA regulation. This helps these companies to focus on their core business while catering to their customers in a better manner.
A typical FATCA compliance solution covers three areas namely; Client Identification, tax withholding and reporting.
VirtusaPolaris' FATCA compliance solution - From identification to filing
VirtusaPolaris' FATCA compliance solution helps financial institutions from the initial client identification process till the final report filing process. The solution also provides robust compliance framework which not only helps the financial institutions become FATCA compliant but also helps their internal functions like operations, legal, finance and tax to adhere to FATCA norms.
VirtusaPolaris' FATCA compliance solution is built on an open-source framework, which allows clients to customize the solution as per their compliance needs with little or no development efforts. VirtusaPolaris' suite of FATCA compliance solution has been classified under two categories.
- VC-FATCA - VirtusaPolaris' classification module
- VR-FATCA - VirtusaPolaris' reporting module
Why VirtusaPolaris' FATCA compliance solution?
- Built on an open-source technology which allows easy customizations for clients based on their FATCA needs.
- No licensing cost
- Integrated use-case pack to jump start the build/testing of a FATCA solution
- Based on industry’s best practices and standards
- Easy integration with existing systems
- Consulting team with functional and technical expertise to guide you through the process
(Deadline based on the starting date of FFI agreement)
(Prima Facie FFIs: a qualified/non-qualified intermediary status or financial industry status based on any standard industry-type code e.g NAICS)
(FDAP: Fixed, Determinable, Annual, Periodical income)
( Gross proceeds paid to custodial accounts)
(Gross proceeds paid to custodial accounts)