Tax Townhall 02.05.18 2 irishfunds.ie
Agenda • Opening – Gareth Bryan, KPMG • AEOI (FATCA and CRS) – Ruth Kelly-McEwen, State Street • Domestic Tax – Seamus Kennedy, Deloitte – Ilona McElroy, PWC • International Tax – Gerry Thornton, Matheson irishfunds.ie
Agenda • VAT – Matthew Broadstock, Matheson • EU Mandatory Disclosure – Gareth Bryan, KPMG • Q&A • Closing irishfunds.ie
AEOI (FATCA and CRS) Working Group Update Ruth Kelly-McEwen – State Street 5 irishfunds.ie
AEOI (FATCA and CRS) WG Update AEOI (FATCA and CRS) WG Current Initiatives; • 2017/2018 AEOI reporting – Review of 2017 reporting and Lessons learned, Engagement with Revenue , Industry Briefing/Quarterly Technical Meetings • 2018 AEOI Reporting Technical Updates – FATCA/CRS Schema changes/Validator issues/Technical questions impacting reporting, issuing Members briefings. • OECD/EU Changes/Updates – affecting AEOI (e.g. MDR/DAC 6) • AEOI Compliance Framework – Revenue Audit Process – Next Steps/Plans. • Industry standard FATCA/CRS Self-Certifications – reviewing in line with regulation changes. • Data Protection – assess the impact on GDPR on AEOI requirements • AML (4/5) – New Beneficial Ownership registers impact on CRS. • Monitoring AEOI developments in other jurisdictions – Cayman, Luxembourg, UK etc. • Domestic obligations – Interaction of CRS legislation with existing Domestic obligations under S891 (TCA) 6 irishfunds.ie
AEOI (FATCA and CRS) WG Update 2018 Reporting 2018 AEOI Reporting Update Ireland • The AEOI filing portal in ROS is now open for the filing of FATCA and CRS returns. • The current version of the offline CRS validator hasn’t yet been updated with EU validation changes for 2018. Returns can still be filed but may pass the offline validator and subsequently fail the final upload validation process in ROS. • Reminder the Due Date for filing of FATCA and CRS Returns remains at 30 June 2018, this includes reporting results of the CRS Pre-Existing Due Diligence review . • Supplementary Returns are required to be filed with Revenue for any CRS Pre- Existing accounts closed during 2016 that have yet to be reported by 30 June 2018. • The schema format for the supplementary returns is the same as the standard CRS format however the message ref and doc ref ID’s and schema details need to reference 2016. • For FATCA , the IRS have confirmed that FI’s no longer be able to use the default of “9 Zero’s” placeholder in place of a U.S TIN” instead 9 capital A’s should be used along with the Date of Birth for the account holder.(see members briefing) 7 irishfunds.ie
AEOI (FATCA and CRS) WG Update 2018 Reporting Lessons learned from 2017 Reporting-Revenue Update • Reminder that it takes at least 3 working days for an Agent link and another 3 working days for a new registration on ROS to be set up. Don’t leave this too late. • If changes need to be made to Revenue static data such as fund addresses etc., (which feeds into the auto generated returns) this needs to be done separately with the local tax district for that FI. • Increased volume of reportable accounts for 2018 (incl. pre-existing data). Revenue File Size of 10MB per submission with a maximum size of 30MB; Most common schema reporting errors last year included ; – Error code 8007 – A/C report Error – mainly incorrect GIINS provided on the Sponsoring/Sponsored entity returns.(See WG update) – Error code 8008 – Schema files contained duplicated report records or the unique message ref and doc ref ID’s were incorrect. • New – GIIN De-registration process: Financial Institutions are required to notify the IRS of its deletion and also notify Revenue as soon as possible (but also ensuring that all necessary filings have been completed prior to deleting the GIIN) • Technical issues can be raised to Irish Funds AEOI WG for discussion at quarterly technical meetings with Irish Revenue. 8 irishfunds.ie
AEOI (FATCA and CRS) Update Revenue AEOI Compliance Framework/Audits; • Revenue are legally required under FATCA and CRS to conduct “compliance reviews” • OECD recently updated CRS Handbook detailing suggested CRS Compliance Framework for Tax Authorities. • Reviews will commence Q2 2018, being led by the Local Revenue District offices. • Applying a risk based approach focused on, reviewing robust procedures and records timeliness of filing FATCA and CRS Returns, the quality of the data received and any errors or questions received from other jurisdictions relating to those filings, • Review of proper audit trail including detailing all the steps taken in the review and classification of accounts along with “Well trained staff”. • Compliance reviews likely to become wider in scope over time and their main focus will be on the quality of the data exchanged. 9 irishfunds.ie
AEOI (FATCA and CRS) update- Regulation GDPR and the impact on FATCA/CRS GDPR FATCA and CRS New legislation introduced by Finance Act 2017 governs Revenue’s processing of taxpayer GDPR requires that both the fund (as data information and taxpayer’s rights in relation to such controller) and administrator (as data processor) to consider and document on what processing. This legislation is contained in section basis they are processing personal data, 851B of the Taxes Consolidation Act 1997 and provides that Revenue’s processing of taxpayer including data gathered and held for FATCA/CRS. information has a legal basis that is compatible with GDPR An inventory of all personal data must be Reminder of “Wider Approach” to CRS Due created under GDPR (which would include that Diligence where all Investors required to provide a information gathered for FATCA/CRS Self-Certification and TIN at the time of account purposes) See DPC website for more detail on opening (See Revenue CRS FAQ) what should be included in the inventory. GDPR provides an opportunity to develop an Irish Funds Industry Standard Self-Certs include organised and strategic approach to collecting Data protection wording and Customer Information and maintaining investor data notices irishfunds.ie
AEOI Regulatory and Technical update OECD Mandatory Disclosure scheme (MDR) Provide Tax authorities with advanced information on arrangements that purport to circumvent CRS and offshore structures that disguise the Beneficial owners of offshore assets. • Intermediaries or (taxpayers) to identify and report to local tax authorities avoidance arrangements or Opaque offshore structures that meet certain “hallmarks”. • Potential retrospective review and disclosures required back to 29 October 2014 • Alternative Funds likely to be considered “Opaque Offshore Structures” and in-scope • Many legitimate financial transactions (such as transfers to non-CRS Jurisdictions) and legitimate changes of beneficial ownership could be in scope • Will all OECD MDR requirements be transmitted into proposed DAC 6? EU DAC 6 EU DAC 6 requires disclosure of potentially aggressive “cross border” tax planning arrangements (scope is broader than OECD MDR ). • Intermediaries or (taxpayers) to identify and report to local tax authorities avoidance arrangements or Opaque offshore structures that meet certain “hallmarks. • Targets aggressive cross border arrangements but no clear definition of the term arrangement. • Definition of Intermediary very broad could include fund promoters and other service providers to fund products). • How will DAC 6 be transmitted into local legislation? irishfunds.ie
AEOI (FATCA and CRS) Update Other Jurisdictions Irish Funds AEOI WG are constantly monitoring developments in other jurisdictions: • The Cayman Islands issued revised CRS guidance reducing the ownership threshold for “CP” from 25% to 10% in line with new AML Legislation enacted in Cayman. o Cayman have also issued revised CRS Entity Self-Certifications to reflect changes in disclosure requirements of ownership. o There is a requirement to request a revised entity self-certification template from all New Passive NFEs from 01 April 2018. o Existing Passive NFEs must be remediated by 31 December 2018. • Cayman Portal is now open and ‘AEOI News and Updates page’ has been updated including a new user guide • Supplementary 2016 Returns - Luxembourg requirements are similar to Ireland. UK/HRMC have taken a slightly different approach where information is to be included in the 2017 return • Reminder to register/notify the relevant tax authorities where there are new FIs. irishfunds.ie
Domestic Tax Working Group Update Seamus Kennedy – Deloitte Ilona McElroy – PWC 13 irishfunds.ie
Domestic Tax • Pan European Pension Plan (PEPP) – submission to EFAMA in February 2018 – agreement in principle with proposal subject to there being no pre-condition of “tax harmonisation” • s1035A – work in progress on submission regarding to cover legislation and guidance • PAYE “Christmas Day” letters from Revenue irishfunds.ie
Domestic Tax • Engagement with Revenue - iXBRL requirement in Finance Act 2017 • Amalgamation of IREF Working Group with Domestic Tax Working Group. irishfunds.ie
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