Thomson Reuters has joined the growing group of vendors providing compliance solutions for the US Foreign Account Tax Compliance Act (Fatca) that came into effect on January 1. Its offer is a modular, yet holistic, solution that can flex in response to elements of the legislation that are still to be determined or may change in future.
The Thomson Reuters for Fatca Solution brings together content and solution assets from the company’s Governance, Risk & Compliance and Tax & Accounting businesses to support Fatca-defined foreign financial institutions (FFIs) that must collect, manage and report all information that could reasonably point to individuals’ liabilities for US taxation to the US Internal Revenue Service (IRS).
The solution comprises modules for on-boarding, featuring US indicia search; self-assessment, including IRS tax form preparation; and tax information reporting, featuring foreign persons’ IRS tax forms 1042, 1042S and 1099. It also offers configurable regulatory and management reporting, and it can be deployed either on an installed or hosted basis.
The component parts of the installed solution are available immediately and are all in use by Thomson Reuters’ customers, although the company expects to attract not only existing, but also new customers to the Fatca solution.
According to Laurence Kiddle, commercial director, Fatca, Thomson Reuters, “The Fatca legislation requires financial services businesses to look carefully at all aspects of their compliance and data operations. Many of these – existing and potential new clients – will be unable to come up with a solution in house or on their own. We want to work in partnership with them to help them deal with the legislation and help them comply. We will help provide the technology that will help them with their obligations as we already do in other areas of our business.”
Describing customer concerns about Fatca solutions and Thomson Reuters’ response, Kiddle says: “We have listened to our customers and what they are looking for is a solution that will fit with their existing systems and does not have the drawbacks of new and untried systems that could be costly. We have drawn on the best of what we offer and improved on it, so that it not only addresses Fatca now, but is flexible enough to respond to any further future changes.
“The Thomson Reuters Fatca solution currently focuses on the compliance process – identify US persons, validate and audit the findings, and maintain on an ongoing basis. Our customers see this as the main focus in current Fatca programmes. For most of them, reporting and withholding is a secondary phase, based partly on the uncertainty surrounding precise definitions in the final regulations and partly on the fact that the Fatca timeline requires these to happen later in the process. We have substantial experience in regulatory filing, which we will – when the final reporting forms are published – apply to our solution. Similarly, we are looking to apply Fatca specific logic to our data feeds to identify, for example, the Fatca status of legal entities, or financial instruments caught under the grandfathering regime.”
Thomson Reuters’ offer of both in-house installed and hosted Fatca solutions is designed to meet the requirements of FFIs that want to integrate specific modules of the company’s solution into existing compliance processes, as well as the needs of organisations that choose to outsource IT provision. The hosted solution will be accessed over the Internet and will be pre-populated with Thomson Reuters’ reference data – for example, US Postal Service data on US addresses for the Fatca indicia check. It will also include the range of validations captured in the installed solution with the reference data being used to test and validate FFIs customer data.
Differentiating Thomson Reuters’ offer in an increasingly competitive market for Fatca solutions, Kiddle concludes: “Thomson Reuters is uniquely placed to provide a solution that can help institutions fulfil and comply with the obligations they are under and support every stage of the challenges they will face as a result of Fatca. While there are existing competitors in a number of the specific areas of Fatca, we believe we can provide a holistic response that others cannot.”
Subscribe to our newsletter
