How Gen II Streamlines FATCA & CRS Reporting for Investment Funds
What is FATCA / CRS?
Both FATCA/CRS are pivotal regulatory and reporting frameworks designed to combat offshore tax evasion. FATCA and CRS have far-reaching impacts on the investment fund industry, requiring investment funds to enhance onboarding processes, collect additional information on investors, and develop reporting processes and procedures.
In United States law, the Foreign Account Tax Compliance Act (FATCA), which came into effect on July 1, 2014, is intended to reduce the levels of tax avoidance by U.S. citizens and entities through foreign financial institutions (FFIs).
Globally, the Organization for Economic Cooperation and Development created the Common Reporting Standard (CRS) to facilitate the automatic exchange of information.
The overarching goal of both the FATCA and CRS frameworks is to give governments a more transparent view of the financial assets their citizens hold in foreign accounts. Though their goals are similar, the FATCA and CRS frameworks have many important differences.
Who Must File?
FATCA and CRS reporting obligations apply to Financial Institutions, a term which is broadly defined and generally captures entities' investment management functions, as well as investment funds themselves.
To ensure proper compliance with the FATCA and CRS legislation, it is imperative that investment funds and investment managers are properly classified and duly registered for FATCA purposes with the IRS, the Department for International Tax Cooperation in the Cayman Islands, or in other local jurisdictions.
Compliance with FATCA and CRS requires meticulous record-keeping, form validation, and ongoing monitoring of investment accounts and investor demographic information. Here, we delve into the essential services offered in Gen II Tax compared to other providers in the industry.
Why Choose Gen II Tax Services?
Gen II Tax offers a comprehensive suite of services to ensure FATCA and CRS compliance. They handle everything from initial data collection and form validation to ongoing monitoring and reporting. Other providers may offer similar services but might lack the depth and integration that Gen II Tax provides.
Tax Services |
Other Providers |
Gen II Tax |
|
FACTA & CRS Processing |
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Fully maintain relevant Fund investor/entity information required by FATCA and CRS regulations |
Case by Case |
Included |
|
Perform the required form validations and perform jurisdictional indicia checks required under FATCA and CRS for each investor |
Case by Case |
|
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Collection of appropriate IRS tax forms (Form of W-8 or W-9) and/or withholding certificates and tax residency self-certifications |
PBC Reliance |
|
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Collecting the appropriate self-certification forms for investors, including identified Controlling Persons and supporting documentation. |
PBC Reliance |
|
|
Reviewing the forms for completeness, accuracy, and validity to determine sufficiency for FATCA and CRS classifications |
Included |
|
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Verifying an Investor’s GIIN against the IRS FFI List for the purposes of the US IGA |
Case by Case |
|
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Ad-hoc reporting for relevant Fund investor/entity information required by FATCA and CRS regulations |
Out of Scope |
|
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Ongoing FACTA & CRS Monitoring |
||
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Monitoring tax forms for expiration, as applicable and, where required |
Included |
Included |
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Request new forms from Investors within a reasonable time before such expiration |
PBC Reliance |
|
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Monitoring for any additional information received from the Fund, or an investor, and updating the investor’s CRS classifications |
Included |
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Ongoing validation of Investors’ GIINs against the IRS FFI list as necessary and monitoring for any additional information received from the Fund, or an investor, and updating the investor’s FATCA statuses |
Case by Case |
|
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Additional Services |
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U.S. Federal Tax Withholding Assistance |
Not Included |
Integrated |
|
Rate Valuation |
Not Included |
|
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Investor IMY Package Creation and Maintenance |
Not Included |
|
Published on: April 24, 2024
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Gen II Fund Services, LLC
805 Third Avenue, 24th Floor
New York, NY 10022
212-408-0550
info@gen2fund.com
General Inquiries:
888-GEN2-001
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