Regular developments in the international tax landscape, from OECD’s Base Erosion and Profit Shifting (BEPS) project to the changes announced in the last Finance Act, can pose perpetual challenges for organisational implementation. Ensuring businesses continue to be tax efficient as well as tax compliant is a challenge that requires expert judgement. Tax authorities’ aspirations to maximise tax collection and clamp down on undesirable tax practices has emboldened them to seek international cooperation and implement transparency regimes such as country-by-country reporting (CbCR) and DAC6.
Hansuke provides specialist and niche corporate tax and business tax advice. We take care of tax compliance work freeing our clients to focus on their core business activities. We prepare and submit tax computations quickly and accurately, ensuring that the latest tax measures such as corporate interest tax relief, corporate capital loss restrictions and surcharge tax have all been properly treated by our team of FS tax experts. Hansuke offers corporate tax advisory services driven by the specific core business objectives of our clients. We leverage our financial services and taxation expertise to assist our clients at the strategic, business-planning level to understand the effect of business strategy on tax profile.
Hansuke provides a broad range of corporate tax services, including:
- Corporate Tax Risk and Strategy;
- Tax Compliance & Reporting;
- Senior Accounting Officer (SAO) process;
- Deferred Tax Asset (DTA) Advisory services; and
- Corporate Tax Training.
As the world becomes increasingly globalised, companies are required to cooperate across borders to ensure that taxpayers adhere to tax regulations. Following the introduction of Common Reporting Standards (CRS) in 2013, financial institutions across the globe are compelled to classify themselves, identify their financial accounts, identify reportable persons and report financial account information on an annual basis to evidence the prevention of tax evasion. The information is then exchanged between participating tax authorities across the relevant jurisdictions.
At Hansuke, we leverage extensive industry experience to provide leading-edge AEoI support to financial institutions. Utilising our strong methodologies and technical expertise, we effectively ensure firms’ reporting processes are properly established, implementing due diligence procedures to document and identify reportable accounts.
Our AEoI services include:
- The development of business requirements and remediation of existing systems;
- The design and implementation of firm-wide systems; and
- Practical procedures to identify and report the required information to local tax authorities.
In the wake of the Criminal Finances Act (2017), firms face greater FCA and overseas regulatory scrutiny. To prevent the facilitation of UK or overseas tax evasion, increasingly drastic measures are being implemented, with firms facing severe reputational damage, hefty fines and criminal sanctions.
At Hansuke, our expert teams provide professional advice and guidance to ensure firms are compliant, including self-reporting and negotiating deferred prosecution agreements. The implementation and management of such procedures can help mitigate financial and reputational risks for a variety of organisations. Our CCO services ensure that our clients remain protected against potential offences, as prescribed in the Criminal Finances Act.
Our services include:
- Undertaking initial risk assessment and securing board-level engagement;
- Communication and training to boards and client-facing teams, developing reasonable procedures;
- Remediation programmes;
- Advising and preparing self-disclosures in the event of the identification of breaches; and
- Negotiating deferred prosecution agreements.
With the introduction of DAC6 in May 2018, tax authorities must identify and address cross-border aggressive tax arrangements. DAC6 as the latest tax transparency measure, imposes mandatory reporting of such cross-border arrangements by firms. Cross-border tax arrangements which meet the description of a ‘hallmark’ are required to be reported to either HMRC or another tax authority in the EU, by financial intermediaries.
Hansuke assists financial institutions understand and build operational capacity to detect, capture and report tax avoidance and planning arrangements. We assist firms to ensure that they have introduced detect, capture and report functionality for reportable cross-border arrangements. Additionally, we support the retrospective review procedure and the reporting process on any reportable arrangement from 25 June 2018 onwards.
Hansuke assists firms with identifying procedures relevant to DAC6 reporting, including:
- DAC6 principal provisions including hallmarks, main benefit test (MBT), EU taxes and intermediaries;
- Cross referencing DAC6 with AML/KYC, CbCR, and tax evasion facilitation;
- Operationalising DAC6 and demonstrating compliance; and
- Practical strategies including communication protocols across multiple intermediaries and reporting.
The US Qualified Intermediary (QI) regime places obligations on the payers of US-source fixed, determinable, annual and periodic income to identify and document their customers under a contract with the US Internal Revenue Service (IRS). Entering into a QI Agreement with IRS places obligations on financial institutions to ensure procedures are in place to monitor and act on changes in customer circumstances, review the overall effectiveness of their controls, and certify these to the IRS.
At Hansuke, our expert team draws on their practical experience of conducting QI periodic reviews and remediations over many years. We assist FS firms in developing governance around ongoing compliance procedures and to meet reporting and certification obligations for the IRS. We emphasise the holistic compliance approach, requiring an analysis of QI policies, procedures, and controls.
Our QI compliance programme includes:
- Registering a QI with IRS;
- Training and ongoing support for Responsible Officer (RO);
- Establishment of internal control processes and governance;
- Development of QI policies and procedures;
- Periodic Reviews (PRs) and Interim Compliance Reviews (ICRs);
- Reviewing tax withholding statements and reporting documentation;
- Training of QI operational staff (including documentation and reporting); and
- RO certification support.
UK individual investors in non-UK funds are taxable on their investment gains in two contrasting ways, at rates of either 20% or 45%. The lower tax rate is only available to individual investors in funds which have elected into UK’s tax reporting regime, known as Reporting Fund Status (RFS). Institutional investors, including funds of funds, may also benefit from RFS; the application for RFS has a profound impact on post-tax investment returns for UK investors.
At Hansuke, our tailored solutions support clients through RFS procedures, ensuring a swift and efficient compliance process. Our structured, client-centric approach enables the provision of appropriate RFS guidance in both qualifying for RFS status and subsequent annual submission of accounts to HMRC for audit.
Securities Tax Services
All financial institutions will at some point engage in dealings in capital markets securities. Tax authorities have increased their scrutiny of securities transactions. Securities taxes are often imposed on notional principal values rather than spreads or net profits. Understanding and managing task risks associated with securities is an essential element of a financial firm’s risk management function.
At Hansuke, our world-class team of securities, finance, and derivatives tax experts leverage years of experience to assess and design tax robust platforms. Our team support leading sovereign institutions, broker-dealers, securities lending agents, asset managers and custodians.
Our Security Taxation services include:
- Security Lending Advisory (SLA);
- Designing and implementing best-in-class withholding tax management systems;
- Supporting (and outsourcing) reclamation of withholding taxes;
- Assistance with negotiating taxation terms within market agreements and SLAs;
- Multi-jurisdictional reviews for new markets and new investments/instruments;
- Securing robust FIN48/IRFIC23 opinions covering the treatment of market transactions and capital gains;
- Analysis of securities financing transactions, including rehypothecation and beneficial ownership reviews;
- Analysis of give-up trades via FIX and otherDMA technology;
- Negotiating with taxation authorities where non-compliance has inadvertently occurred.