55% financial organisations expect to exceed their original budget
Financial organisations expect to exceed their original budget for FATCA compliance, according to a survey conducted by Thomson Reuters, the world’s leading source of intelligent information for business and professionals.
Thomson Reuters conducted a survey of approximately 300 financial institutions during a ‘FATCA Reporting: Are You Prepared’ webinar and found that 55% expect to exceed their original budgets compared with 35% who say they expect to remain on budget.
27% expect their spend on FATCA compliance in 2015 to cost between $100,000 and $1m compared with only 16%, who believed this to be the case when asked the same question in January 2014. This demonstrates a marked increase of 11 percentage points and suggests that financial institutions are only now beginning to appreciate the complexity and significant burden of FATCA.
The timing of the online survey is of particular importance, coming the day following the announcement by the OECD that 51 countries have signed up to the Common Reporting Standard (CRS), which will require increased reporting on an a greater number of customers.
“The whole problem of FATCA has just become bigger,” comments Laurence Kiddle, managing director corporate market EMEA for the Tax & Accounting business of Thomson Reuters.
“CRS is a game-changer. It dramatically widens the reporting scope and this puts massive strain on budgets. A financial institution needs to be able to identify the tax residence of each of their customers – not just whether or not they meet the definition of ‘American Person’ – and have the ability to report this to the relevant authorities. This increase in the scope, depth and complexity of reporting is a very significant challenge.”
FATCA reporting is due from the end of March 2015 and financial organisations are turning their attention to how manage their reporting obligations. According to the results of the same online survey, the preferred approach by 64% respondents is to employ third-party software solutions, either stand-alone or mixed with in-house and in-house build, to manage compliance.
The Thomson Reuters FATCA Reporting Module manages the creation, validation and submission of US FATCA and IGA reports. It supports all schemas already published and future proofs compliance, including the upcoming requirements for CRS.