This blog was last updated on June 26, 2021
Sovos Compliance attended the 14th Automatic Exchange of Information (AEOI) Congress Sept. 14-15 in London. Attendance nearly tripled that of last year’s conference and attendees included representatives from a variety of financial institutions, finance and legal experts, and U.K. and U.S. tax agencies (IRS and HMRC). Topics included changing AEOI requirements, compliance trends and best practices, and applying technology solutions. Sovos presented the results of a recent AEOI benchmarking survey conducted by the Aberdeen Group. Attendees were able to participate in live polling and their responses echoed concerns about changing jurisdictional requirements and a lack of knowledge about the Common Reporting Standard (CRS).
Highlights and Themes
Resources Needed
- Financial institutions are very concerned about potentially gaining a reputation for non-compliance due to a lack of resources, but boards and C-level decision makers still view compliance as a cost center, making it difficult to add needed resources.
- Maintaining AEOI compliance requires both financial and legal expertise and it is difficult to find people who possess both.
Data Privacy
- AEOI reporting makes data privacy concerns more acute because the data is becoming more centralized, and therefore creating an enticing target for breaches.
- Revenue agencies are relying on financial institutions as a “policing layer” to identify unpaid tax obligations.
Compliance and Penalties
- CRS requirements for each jurisdiction can be interpreted differently by individual internal resources, so documenting processes and being consistent across the organization are critical components.
- Tax agencies consider a financial institution’s due diligence and processes when considering issuing penalties, driving home the point that documentation and consistency are imperative.
Technology sparked lively discussion. Mariano Giralt from BNY shared his vision on connecting AEOI reporting to the broader tax compliance solution to tackle change and data projects faster and with more flexibility.
Technology
- A large number of financial institutions have implemented or are actively looking to implement a centralized AEOI technology solution to comply with the variety and complexity of Foreign Account Tax Compliance Act (FATCA), Crown Dependencies and Overseas Territories (CDOT), and CRS reporting. Technology sparked lively discussion. Mariano Giralt from the Bank of New York Mellon (BNY) shared his vision on connecting AEOI reporting to the broader tax compliance solution in order to tackle change and data projects faster and with more flexibility.
- Technology, communication, and project management are critical skills for compliance teams.
- Many AEOI compliance teams are very small and must oversee and manage technology solutions and vendors. Building a large in-house team is often not an option.
Take Action
- Contact us today to start your subscription of Sovos Taxport Compass to have access to all the latest Tax Information Reporting updates, including AEOI, 1099, and Affordable Care Act reporting.
- To learn more about how a centralized AEOI solution can mitigate these common challenges, read our new benchmarking report.