FACS: FATCA and CRS Service

FATCA and CRS: Global tax compliance is here and so is the service to keep you in control.

 FACS logo 2

 Download our 2 page leaflet or more detailed brochure and play our videos including:

Video 1: FACS (FATCA and CRS Service) Overview
Video 2: FDIS (FACS Data Ingestion Services) Overview
Video 3: FDIS (FACS Data Ingestion Services) Demonstration 


  FACS is an Australian built, ABSIA registered, FATCA and CRS service with comprehensive Australian Tax Office supported functionality.

ABSIA logo

With years of professional experience at major financial institutions, our staff have been able to analyse and understand exactly what is needed to reduce the burden of these complex tax regimes. We have seen first hand what works and what does not. We know what approach is needed for success.

This knowledge and experience has allowed us to develop a powerful and flexible FATCA and CRS service. This service enables you to take control of your global tax compliance obligations in a manner that minimises costs, maximises productivity and allows you to optimise for the specific needs of your business.

Our aim is simple. To produce the best FATCA and CRS compliance service available and to continually improve by working closely with our clients and listening to their needs.  


FACS Solution: Business Scope

Our scalable, flexible and configurable business ready solution provides a single platform for compliance across all stages of the FATCA and CRS regulatory reporting process.

GCSA FACS Product circle logo


FACS Solution: Key Components

FACS is the solution of choice.  Our differentiated service applies technological innovation to a predominantly data driven problem focusing resources on streamlined and optimized processes.

GCSA FACS Solution on a page diagram


 Frequently Asked Questions

# Question Responding Organisation 
Answer
1 We already have a FATCA reporting solution. Can you use FACS just for CRS? GCS Agile

Yes. Firstly, the data required for both FATCA and CRS are largely the same. FACS caters for both reporting regulations and can be enabled separately or together at the click of a checkbox in the configuration.

2

Is FACS secure?

GCS Agile Yes - we provide multiple infrastructure options to keep customer data secure including both private and public cloud configurations. All data is encrypted both at rest and in flight.
3 Is FACS compliant? GCS Agile Yes - we regularly consult the ATO and other Tax Authorities globally to keep abreast of compliance rules (which often change) and to codify these within the FACS rules engine.  We also complete self certification programs where available including:
  • US Inland Revenue Service (IRS) International Data Exchange Service (IDES) report submission test facility
  • ATO XML form 8966 V2.0.0 self certification process (ie. the current FATCA Schema 2.0)
FACS is also listed on the Australian Business Software Industry Association (ABSIA) product registry at the following link.
4 We have many different businesses (including Retail, Wealth, Corporate and Institutional Banking, Insurance, to name a few). Can you cater for all of these given the customer requirements and relationships differ? GCS Agile Yes. Part of our differentiation is that we can cater for many, varied and changing business rules. These rules are applied though flexible configuration settings that can be quickly and easily changed over time.
5 We operate in multiple jurisdictions. Can FACS cater for the variances across these, especially when some jurisdictions have custom report schemas? GCS Agile Yes. FACS has been designed from the ground up to cater for the differences between jurisdictions and to support multiple reporting schemas.
6 How long does it take to deploy FACS? GCS Agile

With no integration we can get you up and running under 3 months.  

If you want to take advantage of our data cleansing and transformation capabilities or connect other integration points such as Single Sign On (SSO), email or document management systems, then we will work with you to complete this ASAP.

7 I have produced my annual report, but I haven’t retained a detailed audit trail. Does this matter? Australian Tax Office  

Yes it does. Audit trails are critical as it demonstrates your intent to report accurately. The CRS legislation also has a specific record keeping provision (s396-125 of Sch 1 of the TAA) imposing the requirement and time frame for retention (5 years from the relevant 31 July reporting time).

8 How large will the fines for non compliance be? Australian Tax Office 

Due diligence, record keeping and reporting obligations under the CRS all fall under the general tax penalties regime. The purpose of the penalty provisions is to encourage taxpayers to take reasonable care to comply with their obligations. Penalties will vary depending on the number of reportable accounts not reported to the ATO. One penalty unit is applied to each instance of non-collection of a self-cert. One penalty unit is also applied for a failure to lodge a CRS statement for each period of 28 days up to 5 such periods. With a multiplier for medium and large entities (x2 or x5) and a further multiplier for Significant Global Entities (SGEs) (x100) for each reportable account. A penalty unit is currently $180 and will increase to $210 from July 1.  

Additional information on the application and remission of penalties can be found here.

9 Are the ATO still happy with a “best efforts” approach to FATCA and CRS? Australian Tax Office  FIs should be aiming for 100% compliance, particularly for new accounts. In relation to pre-existing accounts best efforts is a relevant factor when accounts have been identified as reportable and it is necessary to obtain info from the client – a TIN and perhaps a date of birth. Best efforts are a requirement in this case. Best efforts as a minimum in this scenario is a request to the client each year for 3 years.
10 Do I need to provide reasons for not reporting customers? Australian Tax Office  Not as a matter of course. If the necessary due diligence has been done and an account is found not to be reportable, we may at some stage ask to see the procedures you used. In the case of nil reporting (filing with us with no account information because you have no accounts to report) then nil reporting is not required. However we would encourage voluntary nil filing as this can be a means for us to prioritise any compliance checks. A nil report tells us that you know you have CRS obligations and have come to the view that there is nothing to report. An absence of any report could cause an enquiry from the ATO.
11 Do I have to validate each TIN I collect? Australian Tax Office 

 If an RFI has knowledge of the TIN format in the jurisdiction it operates, it could validate a TIN. However, the standard does not require validation. If a TIN exists, it must be collected.  

Additional information on TIN's can be found here.

12 Will the ATO produce guidance on the self certification? Australian Tax Office 

No the ATO hasn’t specified the design of self-certs nor do we endorse any particular design. This is in the hands of the Reportable Financial Institution (RFI) as they have the flexibility to design for their own needs. Our focus is on the outcomes - does it ultimately allow the RFI to determine whether accounts are reportable and does it collect the info that is needed?

Additional information on CRS and FATCA can be found in our Automatic Exchange Of Information guidance here.

13 Many foreign residents don't have Australian citizenship, but have permanent residency and won't take up Australian citizenship as they cannot have dual citizenship, but Australia is now their home permanently. How are these customers to be treated as opposed to expats on short term assignments.  Australian Tax Office 

Australian citizenship or visa status is not determinative of Australian tax residency.

The ATO has extensive information on tax residency here.

14 How are Australian Privacy acts not breached by providing customer information to foreign entities? Australian Tax Office 

The agency with responsibility for the Commonwealth's Privacy Act is the Office of the Australian Information Commissioner (OAIC). Detailed enquiries should be directed to the OAIC. As a general statement, we note that under the Australian Privacy Principles information may be used and disclosed when required by law, including when required by tax law. Our tax laws require Australian Financial Institutions to provide certain CRS related information to the ATO and the ATO is obliged to exchange that information with other tax authorities in accordance with our treaties and Conventions.

# Question Responding Organisation 
1 We already have a FATCA reporting solution. Can you use FACS just for CRS? GCS Agile
Answer

Yes. Firstly, the data required for both FATCA and CRS are largely the same. FACS caters for both reporting regulations and can be enabled separately or together at the click of a checkbox in the configuration.

2

Is FACS secure?

GCS Agile
Answer Yes - we provide multiple infrastructure options to keep customer data secure including both private and public cloud configurations. All data is encrypted both at rest and in flight.
3 Is FACS compliant? GCS Agile
Answer Yes - we regularly consult the ATO and other Tax Authorities globally to keep abreast of compliance rules (which often change) and to codify these within the FACS rules engine.  We also complete self certification programs where available including:
  • US Inland Revenue Service (IRS) International Data Exchange Service (IDES) report submission test facility
  • ATO XML form 8966 V2.0.0 self certification process (ie. the current FATCA Schema 2.0)
FACS is also listed on the Australian Business Software Industry Association (ABSIA) product registry at the following link.
4 We have many different businesses (including Retail, Wealth, Corporate and Institutional Banking, Insurance, to name a few). Can you cater for all of these given the customer requirements and relationships differ? GCS Agile
Answer Yes. Part of our differentiation is that we can cater for many, varied and changing business rules. These rules are applied though flexible configuration settings that can be quickly and easily changed over time.
5 We operate in multiple jurisdictions. Can FACS cater for the variances across these, especially when some jurisdictions have custom report schemas? GCS Agile
Answer Yes. FACS has been designed from the ground up to cater for the differences between jurisdictions and to support multiple reporting schemas.
6 How long does it take to deploy FACS? GCS Agile
Answer

With no integration we can get you up and running under 3 months.  

If you want to take advantage of our data cleansing and transformation capabilities or connect other integration points such as Single Sign On (SSO), email or document management systems, then we will work with you to complete this ASAP.

7 I have produced my annual report, but I haven’t retained a detailed audit trail. Does this matter? Australian Tax Office
Answer  

Yes it does. Audit trails are critical as it demonstrates your intent to report accurately. The CRS legislation also has a specific record keeping provision (s396-125 of Sch 1 of the TAA) imposing the requirement and time frame for retention (5 years from the relevant 31 July reporting time).

8 How large will the fines for non compliance be? Australian Tax Office 
Answer

Due diligence, record keeping and reporting obligations under the CRS all fall under the general tax penalties regime. The purpose of the penalty provisions is to encourage taxpayers to take reasonable care to comply with their obligations. Penalties will vary depending on the number of reportable accounts not reported to the ATO. One penalty unit is applied to each instance of non-collection of a self-cert. One penalty unit is also applied for a failure to lodge a CRS statement for each period of 28 days up to 5 such periods. With a multiplier for medium and large entities (x2 or x5) and a further multiplier for Significant Global Entities (SGEs) (x100) for each reportable account. A penalty unit is currently $180 and will increase to $210 from July 1.  

Additional information on the application and remission of penalties can be found here.

9 Are the ATO still happy with a “best efforts” approach to FATCA and CRS? Australian Tax Office 
Answer FIs should be aiming for 100% compliance, particularly for new accounts. In relation to pre-existing accounts best efforts is a relevant factor when accounts have been identified as reportable and it is necessary to obtain info from the client – a TIN and perhaps a date of birth. Best efforts are a requirement in this case. Best efforts as a minimum in this scenario is a request to the client each year for 3 years.
10 Do I need to provide reasons for not reporting customers? Australian Tax Office 
Answer Not as a matter of course. If the necessary due diligence has been done and an account is found not to be reportable, we may at some stage ask to see the procedures you used. In the case of nil reporting (filing with us with no account information because you have no accounts to report) then nil reporting is not required. However we would encourage voluntary nil filing as this can be a means for us to prioritise any compliance checks. A nil report tells us that you know you have CRS obligations and have come to the view that there is nothing to report. An absence of any report could cause an enquiry from the ATO.
11 Do I have to validate each TIN I collect? Australian Tax Office 
Answer

 If an RFI has knowledge of the TIN format in the jurisdiction it operates, it could validate a TIN. However, the standard does not require validation. If a TIN exists, it must be collected.  

Additional information on TIN's can be found here.

12 Will the ATO produce guidance on the self certification? Australian Tax Office 
Answer

No the ATO hasn’t specified the design of self-certs nor do we endorse any particular design. This is in the hands of the Reportable Financial Institution (RFI) as they have the flexibility to design for their own needs. Our focus is on the outcomes - does it ultimately allow the RFI to determine whether accounts are reportable and does it collect the info that is needed?

Additional information on CRS and FATCA can be found in our Automatic Exchange Of Information guidance here.

13 Many foreign residents don't have Australian citizenship, but have permanent residency and won't take up Australian citizenship as they cannot have dual citizenship, but Australia is now their home permanently. How are these customers to be treated as opposed to expats on short term assignments.  Australian Tax Office 
Answer

Australian citizenship or visa status is not determinative of Australian tax residency.

The ATO has extensive information on tax residency here.

14 How are Australian Privacy acts not breached by providing customer information to foreign entities? Australian Tax Office 
Answer

The agency with responsibility for the Commonwealth's Privacy Act is the Office of the Australian Information Commissioner (OAIC). Detailed enquiries should be directed to the OAIC. As a general statement, we note that under the Australian Privacy Principles information may be used and disclosed when required by law, including when required by tax law. Our tax laws require Australian Financial Institutions to provide certain CRS related information to the ATO and the ATO is obliged to exchange that information with other tax authorities in accordance with our treaties and Conventions.

 


Understanding FATCA and CRS

The Foreign Account Tax Compliance Act (FATCA) was put in place by the United States government in an effort to reduce US income tax avoidance. It places compliance obligations on non-US financial institutions to identify US taxpayers and report on them annually. It also involves withholding requirements for payments to certain foreign entities and financial institutions.

The Common Reporting Standard (CRS) was developed by the Organisation for Economic Cooperation and Development (OECD) with similar aims. To assist participating jurisdictions in reducing tax avoidance, CRS specifies a global reporting standard for the automatic exchange of financial account information (AEoI). As with FATCA, there are due diligence obligations on financial institutions to both identify and report on residents from other nations.


Consequences of FATCA and CRS

Compliance

Failure to comply with FATCA and CRS involves not only the risk of reputation damage, but also significant financial penalties. While these regimes are new, strong precedents exist for similar financial crime prevention regimes, such as Anti-Money Laundering (AML) and Sanctions Screening, where financial institutions have already been forced to pay fines up to, and exceeding, $1 billion. [1,2,3] 

Costs

Estimates of the implementation and on-going costs of FATCA and CRS are significant. For FATCA alone, the costs for large financial institutions could exceed $100 million [4,5] and the addition of CRS only increases this number. Even for smaller financial institutions, the costs are substantial. With such large sums involved, the need for a cost effective solution is vital.

Customers

FATCA and CRS impact customers. Financial institutions are required to obtain additional information from their account holders and, in certain circumstances, documentary evidence also. The result is unavoidable: FATCA and CRS affect the customer experience. The degree to which that impact is positive or negative depends on the solution each financial institution puts in place. 


Meeting The Challenge

FATCA and CRS are complex regimes and despite their similarities they each pose unique challenges. To meet these challenges, Financial institutions need a single, comprehensive service built by people who not only understand the complexities, but know how to simplify them.

GCS Agile have developed a powerful and flexible FATCA and CRS service to help you reduce your compliance burden, streamline your business processes and minimise costs. In an ever-changing global tax compliance landscape, we are committed to helping you take control of your FATCA and CRS obligations, both now and in the future.


Features and benefits

Take control of your FATCA and CRS compliance

  • Identification, classification, due diligence and reporting
  • Automatic tracking of change of circumstance
  • Annual re-tests of account balances for pre-existing customers
  • Identify which customers are subject to FATCA withholding

Reduce costs, increase productivity, streamline processes

  • Increase operational efficiency via sophisticated workflow functionality
  • Tailored to your business via a powerful, rule-based configuration engine
  • Reduce operational costs through a high level of automation
  • Optimise your business with comprehensive executive reports

Fits in easily with your business

  • Designed to work with your existing business processes
  • Flexible and scalable architecture
  • Easily integrates with your existing technology landscape
  • Secure, with a comprehensive audit trail

One Platform

Variation is inevitable. Flexibility gives you control.

Financial institutions that operate in multiple jurisdictions are forced to deal with country-specific differences in terms of regulations, reporting schemas and submission processes. Even within a single jurisdiction, both FATCA and CRS offer multiple paths to compliance, allowing financial institutions to optimise. After all, the best approach for your Retail customers may not be the same as for your Commercial clients. 

Our powerful, rule-based configuration engine can easily cater for numerous variations, from multiple jurisdictions to the needs of different business units and the quirks of various source systems. With one platform you can cater for all your FATCA and CRS compliance needs.


Customer Experience

FATCA and CRS impact customers.

Additional paperwork and requests for documentary evidence are unavoidable. This leads to increased customer frustration and enquiries. How do you guarantee the best possible customer experience? By giving your staff a single, comprehensive service that has everything they need in one place.

The alternative? The use of disparate systems that were not designed with FATCA and CRS in mind. Customer and account data that reside in separate locations. Due diligence checks performed by one platform, but managed from another. Multiple systems, but no clear picture.

We understand that you value your customers. By putting all the vital information you need in one location, our service enables you to give them the experience they deserve.


Powerful Metrics

FATCA and CRS impact your organisation.

To know where you stand you need powerful metrics. Without them you cannot guarantee compliance, streamline your processes or drive down costs.

Better productivity, increased efficiency, reduced errors. They are only possible with up-to-date, accurate data that lets you identify issues early so you can take pro-active steps to resolve them. 

Our FATCA and CRS service puts you in control with a range of executive reports that let you:

  • monitor your organisation’s compliance status
  • view the foreign tax demographics of your customers
  • understand where you can optimise your process

Manage Change

FATCA and CRS are constantly evolving.

Interpretation is on-going, clarifications are frequently issued and jurisdictions around the world continue to add country-specific variations to what is already an incredibly complex domain. The only certainty is change. 

While we cannot stop this change from happening, we are committed to keeping you on top of your FATCA and CRS obligations, both now and in the future. That is because FATCA and CRS are our number one focus.

We track updates, monitor changes and then use this knowledge to continually improve our service. But we do more than this. We also listen and work with you as an active partner to ensure that our FATCA and CRS service is not only right for you today, but will become even better for you tomorrow.


 [1] http://www.reuters.com/article/us-bnp-paribas-settlement-idUSKBN0F52HA20140701
[2] http://www.forbes.com/sites/robertwood/2014/05/19/credit-suisse-guilty-2-5-billion-fine-but-avoids-death-in-u-s-ubs-was-luckier/
[3] http://www.reuters.com/article/us-hsbc-probe-idUSBRE8BA05M20121211
[4] http://www.forbes.com/sites/robertwood/2011/11/30/fatca-carries-fat-price-tag/
[5] http://www.greenbacktaxservices.com/blog/real-look-at-fatca-and-possible-issues-and-costs/