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Operational tax matters

Opportunity lies within change

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Operational tax – does it matter?

In the current environment, the financial sector faces a multitude of different challenges: ongoing volatility in the markets, cost cutting programmes, increasingly complex regulations, and constantly changing tax and operational rules. The complexity of managing these challenges is further increased by the tendency for globalisation and increasing cross-border competition. One of the areas which needs to be managed carefully is the operational tax environment.

Our integrated service offer

Please find below details of the operational tax areas in which we can serve you. We propose an integrated service offer, perfectly tailored to your specific needs in any of these areas.

	Foreign Account Tax Compliance services \| Get ready now Financial institutions need to act now in order to understand the scale of the compliance challenge they face and to have the best chance of an orderly and cost effective implementation of the required process and procedures.
	EU tax reclaim opportunities \| Take advantage of favourable ECJ/EFTA case law For more than 20 years, the ECJ and the EFTA Court have dismantled discriminatory or restrictive measures to the extent that national rules deter investors of other member states from crossborder investments.
	EU Savings Directive \| Be prepared for phase II A review process of the EUSD directive has been running for several years with an aim to ‘close the loopholes’ of the current EUSD. This process resulted in European Commission proposals for a reviewed EUSD.
	The Tax Matrix \| A highly flexible tool for banks and investment funds The Tax Matrix is a customised tool, providing an overview of relevant tax aspects in relation with investments funds, their investors and their investments, also in relation with the taxation of any type of financial products on a cross-border basis.
	Pan-European tax reporting \| A challenge for funds Nowadays, UCITS and other investment vehicles are invested and their shares or units distributed in various countries around the world, which may trigger tax issues to be managed on the fund’s income side,
	Tax reporting for private banking clients \| First class services required to stay competitive Financial institutions have individual clients who may be resident in various jurisdictions all over the world. Any income generated on portfolios held by these individuals is usually subject to tax in the home country of the investor.
	The Qualified Intermediary regime \| A full range of services to serve you The QI status allows financial intermediaries to avoid a considerable workload of administrative tasks in relation to the U.S. source income payments and, above all, makes it possible to preserve customer identity with regard to non-U.S. investors.

Our multidisciplinary teams can help you

Our operational tax teams combine in-depth experience in operational tax matters with a truly multidisciplinary approach, combining the services of experienced tax advisers, consultants and auditors as and when required.Our Luxembourg teams have strong relations with highly skilled operational tax teams within our international network. You will find the key contacts on each of the dedicated inserts.

What is operational tax?

Operational tax refers to the rules relating to withholding tax, tax reporting, and the taxation of financial products, investment funds and their investors. In practice, the operational tax area includes matters such as:

Application of, and compliance with, the EU Savings Directive
Obtaining, maintaining and managing the U.S. qualified intermediary status
Application of FATCA requirements
Tax reporting obligations for investment funds
Exploiting favourable ECJ decisions in relation to withholding tax
Managing global withholding tax requirements on financial products
Managing taxation of investment fund vehicles and their investors
Producing tax certificates for private banking clients

Why does it matter?

Operational tax aspects impacting your banking, funds or insurance business can be looked at from different angles:

Risk management	Tax optimisation	(Compulsory) reporting and auditing	Tax processes optimisation
Ensure and monitor compliance with operational tax requirements on an ongoing basis. Example: EU Savings Directive and FATCA	Ensure optimisation opportunities are identitied. Example: non-discrimination rules to reclaim tax unduly withheld	Ensure obligatory and voluntary reporting as well as auditing obligations are complied with Example: QI audits, German tax reporting for funds	Ensure compliance with operational best practices, aim to streamline and automate tax processes where possible. Example: automated tax statements production and reporting

Risk management

Tax optimisation

(Compulsory) reporting and auditing

Tax processes optimisation

Ensure and monitor compliance with operational tax requirements on an ongoing basis.

Example: EU Savings Directive and FATCA

Ensure optimisation opportunities are identitied.

Example: non-discrimination rules to reclaim tax unduly withheld

Ensure obligatory and voluntary reporting as well as auditing obligations are complied with

Example: QI audits, German tax
reporting for funds

Ensure compliance with operational best practices, aim to streamline and automate tax processes where possible.

Example: automated tax statements production and reporting

	Foreign Account Tax Compliance services \| Get ready now Financial institutions need to act now in order to understand the scale of the compliance challenge they face and to have the best chance of an orderly and cost effective implementation of the required process and procedures.
	EU tax reclaim opportunities \| Take advantage of favourable ECJ/EFTA case law For more than 20 years, the ECJ and the EFTA Court have dismantled discriminatory or restrictive measures to the extent that national rules deter investors of other member states from crossborder investments.
	EU Savings Directive \| Be prepared for phase II A review process of the EUSD directive has been running for several years with an aim to ‘close the loopholes’ of the current EUSD. This process resulted in European Commission proposals for a reviewed EUSD.
	The Tax Matrix \| A highly flexible tool for banks and investment funds The Tax Matrix is a customised tool, providing an overview of relevant tax aspects in relation with investments funds, their investors and their investments, also in relation with the taxation of any type of financial products on a cross-border basis.
	Pan-European tax reporting \| A challenge for funds Nowadays, UCITS and other investment vehicles are invested and their shares or units distributed in various countries around the world, which may trigger tax issues to be managed on the fund’s income side,
	Tax reporting for private banking clients \| First class services required to stay competitive Financial institutions have individual clients who may be resident in various jurisdictions all over the world. Any income generated on portfolios held by these individuals is usually subject to tax in the home country of the investor.
	The Qualified Intermediary regime \| A full range of services to serve you The QI status allows financial intermediaries to avoid a considerable workload of administrative tasks in relation to the U.S. source income payments and, above all, makes it possible to preserve customer identity with regard to non-U.S. investors.