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FLEXTERA FATCA

Become FATCA compliant with FLEXTERA

The Foreign Account Tax Compliance Act (FATCA) introduced by the US government and effective since 1 July 2014, implies significant reporting and disclosure obligations on foreign financial institutions (FFIs) and non-financial foreign entities (NFFEs).

Under FATCA, financial institutions, both US and foreign, must identify all persons who are obliged to make a tax payment in the US, as well as foreign entities in which US taxpayers hold a substantial ownership interest, and report directly to the US IRS (Internal Revenue Service) about financial accounts held by them.

If the financial institutions does not enter into agreement with the IRS and don`t report on US taxpayers, they are liable to pay a 30% penal withholding tax on payments from sources within the US.

The US legislator made a decision to introduce FATCA due to significant annual loses by U.S. Treasury. It has been estimated that offshore tax non-compliance results in up to $100 billion loses annually.

To be compliant with FATCA financial institutions should modify their existing systems, customer identification and communication mechanisms, reporting procedures and withholding tax administration. They require robust and cost-effective solution that will help them to fulfill their obligations under the US Government while keeping the focus on their core business.

Leveraging an in-depth experience and deep expertise, Diasoft posses an extensive knowledge on global regulations. In order to help financial institutions be compliant with FACTA and manage the compliance process centrally, Diasoft introduced to the market its FLEXTERA FATCA solution.

FLEXTERA FATCA provides advanced tools for automatic verification of clients and payment documents against flexibly configured rules and schemes, their categorisation and due diligence. In case of identification of US clients or foreign entities in which US taxpayers hold a substantial ownership interest, the information on them is automatically reported to authorities. FLEXTERA is designed to help financial services institutions streamline processes for immediate as well as long-term compliance with FATCA.

The functional scope of FLEXTERA FATCA covers three key areas:

  • Customer Identification and categorization

Identification of bank customers US-persons and accounts, belonging to US citizens and their categorization

  • Withholding

Identification of income subject to tax, withholding tax calculation

  • Reporting

Generation of periodical reporting for IRS on US persons and entities, including their income, loans and accounts balances

With FLEXTERA FATCA you will obtain numerous benefits, including:

  • Flexibility — FLEXTERA FATCA ensures flexible configuration and customization.
  • Seamless integration — FLEXTERA FATCA can be seamlessly integrated with other systems and smoothly interact with third party applications. It has been developed to minimise any impact on existing infrastructure of our Customers.
  • High-level STP — FLEXTERA FATCA is designed to provide financial institutions with the most efficient means of serving clients through automated, easy to use processes;
  • Reduced TCO — FLEXTERA FATCA ensures seamless integration with other solutions and comprehensive process engineering tools which can be easily managed by non-programmers allow keeping maintenance costs low and ensure dynamic business development;
  • Multi-language Support — FLEXTERA FATCA is a multi-language solution providing support for the bank staff all around the globe;
  • SOA-based Architecture — FLEXTERA FATCA can be delivered either separately or as a part of a complex solution automating various parts of the financial business. FLEXTERA FATCA is easily integrated into infrastructure of any financial institution and ensures simple configuration, management, customization and product launch;
  • Deep market expertise and vast experience — Diasoft offer to its Customers its deep market expertise and FATCA analysts with vast experience.

 

Only the most flexible and technologically advanced companies will easily adjust to the new market conditions and turn new challenges into business advantages. With FLEXTERA FATCA you will obtain a proven technology for a long-term FATCA compliance, and will be able to decrease expenses on compliance with regulatory requirements and minimize your operational risks (penalties and sanctions).

 

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