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Areas of Expertise

Tax Reporting & Compliance

Managing tax reporting obligations efficiently has become a complex and daunting task for many high-net-worth individuals and families, particularly if several jurisdictions are involved. As tax laws and regulations are constantly changing, it can be difficult to stay informed of all tax and reporting obligations that are required and how these are applied on a practical level. This also applies to financial institutions that are required to provide tax reporting information for their own clients who have tax obligations in other jurisdictions.

As a result, clients choose to engage our experienced tax law specialists to help them navigate through the intricacies of their tax and information reporting obligations. Typically, our advice in this area includes:

Tax compliance software solutions

To assist with the high volume of work now involved for banks and financial institutions in providing tax reporting data in relation to their clients, we develop software solutions for such institutions that automate the process of creating the required tax reports. The software enable us to extract the relevant data from the banks on an anonymous basis, create the reports and deliver these back to the institutions, whilst always maintaining full compliance with applicable confidentiality rules, FINMA and other regulations. To date, we have implemented this for several large, international, financial institutions based in Switzerland.

Compliance with exchange of information regulations

Due to the recent and upcoming implementation of several key regulations regarding the exchange of information between governments and financial institutions (such as FATCA, global FATCA or “GATCA” (i.e., the OECD Common Reporting Standard)), we offer clients guidance on whether they are subject to reporting obligations as a result of these regulatory developments and, if so, the practical steps that they need to take to stay compliant. This has notably included advising financial and fiduciary institutions on FATCA compliance to assist them with the creation of in-house due diligence processes to ensure ongoing compliance with the new requirements.

Tax regularization

It is common for individuals to discover that they have failed to comply with certain tax and information reporting obligations in previous years, for example where they have unknowingly incurred tax obligations in a jurisdiction other than the jurisdiction of residency. We therefore frequently assist clients by evaluating their current and past tax reporting obligations, advising them on their regularization options and implementing the chosen option.

These matters often arise in relation to the U.S. in particular, as U.S. citizens retain U.S. tax liabilities regardless of where they reside. Our U.S. tax team has broad experience with non-compliant U.S. taxpayers and regularizing their situation with the U.S. Internal Revenue Service (IRS). For a comprehensive review of these U.S. strategies, please follow this link: Regularization Options for Non-Compliant US Taxpayers (October 15, 2014). Our Spanish tax team also has significant experience with regard to the post-tax-amnesty regularization procedures for Spanish tax residents.

Beneficiary statements for beneficiaries of trusts and foundations

We advise on and prepare Foreign Grantor Trusts and Foreign Non-grantor Trust Beneficiary Statements for fiduciary companies where a trust or foundation has U.S. person beneficiaries. The Beneficiary Statements are required for any U.S. person receiving a benefit from a non-U.S. trust. These statements are ultimately submitted to the IRS.

In all aspects of tax reporting and compliance, we aim to provide clients with clear, straightforward legal advice to ensure that they fully understand their obligations, and to assist them from a practical point of view to comply with these in the most efficient way possible.

For any queries or further information, please contact Matthew Ledvina or Jennifer Mayo

Examples of our work include:

Assisting a U.S. national residing outside of the U.S. to regularize his tax situation with the IRS, by guiding him through a strategy to regularize his U.S. tax situation. During this process, we gather documents from the financial institutions, prepare the new U.S. tax returns, and manage the process from start to finish with the IRS.

Assisting a European-based fiduciary company to produce a beneficiary statement for each trust structure with U.S. person beneficiaries. Previously, the fiduciary company was sending financial data to over 100 different accounting firms to produce the beneficiary statement. With the new solution, the fiduciary company has one single provider for the beneficiary statement which results in it dealing with one contact point only, and a more reliable product.

Creating customized software for a Swiss private bank that is able to produce standardized tax reports for the bank’s Spanish tax resident clients, to replace the tax report system that it used previously. The software is able to generate a tax report for each such client that contains all necessary data required to satisfy their Personal Income Tax, Wealth Tax and other tax reporting obligations (720 Form).

Assisting numerous trust companies with their FATCA compliance, including providing in-house training for staff, classifying and, where necessary, registering entities, choosing compliance paths for in-house entities and client structures, developing procedures for due diligence and account openings, and advising on reporting obligations.

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