A-Team Insight Blogs

Deutsche Bank Indonesia Teams with Xceptor to Automate Tax Processes for Post-Trade Settlement

Deutsche Bank Corporate Bank has adopted an automated workflow platform for the administration of capital gains withholding tax during the post-trade settlement process in Indonesia. The platform, based on the Xceptor Tax Solution, is aimed at streamlining manual processes and reducing the time to calculate withholding tax amounts down to seconds.

Deutsche Bank will also utilize APIs to send real-time settlement details to the Xceptor Tax Solution. In addition, the solution will electronically manage the documentation process. The project was initiated in February 2020, when Deutsche Bank announced its partnership with Xceptor to automate the bank’s core processes in Indonesia, as part of its broader optimisation and digitisation strategy. The Xceptor Tax Solution delivers end-to-end processing capabilities for Operational Withholding Tax. The solution comprises of five major components covering the main back-office processes in a custody tax operation.

According to Anand Rengarajan, Managing Director, Global Head of Sales and Head of Asia Pacific – Securities Services, at Deutsche Bank, “Our continued efforts to execute on the bank’s global optimization and digital strategy within our Securities Services business are of critical importance. Product enhancements such as the automation of tax processes, which we will look to replicate in other markets, directly benefit our foreign institutional clients such as global custodians, sovereign wealth funds and asset managers by providing faster turnaround times and improved accuracy.”

With tax authorities globally elevating the level of scrutiny around withholding tax as they seek to plug the holes in their governments’ finances caused by the Covid-19 pandemic, financial intermediaries are struggling to deal with the complexity of different jurisdictions’ requirements, which can impede efficient and scalable handling of clients’ tax relief and reclaim requests. At the same time, investment firms are keen to address the historic lack of accuracy around tax withholding, which often leads to overcompensation, which in turn can reduce the amount of capital available for investment activities. Additionally, the penalties for error can be significant.

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