Channel Island Businesses still have a lot to consider for the next stages of the Foreign Account Tax Compliance Act (FATCA) implementation, delegates heard at a recent breakfast seminar hosted by EY.

The event, led by Wendy Martin, EY’s Tax Executive Director, highlighted:

1. The recent updates made to the FATCA guidance notes and the imminent arrival of the Common Reporting Standard (CRS) to address what Channel Island businesses should be doing next to meet the 2015 deadlines.

Mrs Martin said:

1. “While it has been reported that the majority of local businesses are prepared for FATCA, a quick survey of the room suggested otherwise.
2. Most are still feeling the burden and there is clearly work to be done to ensure effective identification of accounts and efficient reporting,”
3. “With only a few months until reporting starts, 2015 is going to be a busy year.
4. The recent revisions to guidance notes in Jersey, Guernsey and the Isle of Man are important to note; while the jurisdictions are largely similar and are working together in many respects, there are some subtle but important differences in the notes reflecting legislative differences in each.
5. There is also useful clarification on Employee Benefit Trusts.”

James Guthrie, EY associate partner in the London office who was also speaking at the event, discussed:

1. how the introduction of the CRS means further preparation is needed this year.

James Guthrie said:

1. “It is crucial that businesses have a mechanism in place to report under the CRS, which, although similar in many respects to the existing intergovernmental agreements, will require additional work.
2. The ideal is to have in place a future-proof solution that can be adapted to any upcoming regulatory requirements,”
3. “It is important that businesses understand the sequencing for CRS reporting but also understand that, while preparation is important, not everything needs to be done from day one.’

Mrs Martin said that 90 jurisdictions had committed to implement CRS with more than 50 having signed an agreement to bring it into force from 1 January 2016.

• “There is an ever-increasing requirement for automatic exchange of information and all of the actions businesses take now will help reduce the burden at later stages.
• There is time, but we would strongly advise

1. creating road maps for both the next stages of FATCA and
2. implementation of CRS to establish each of the important deadlines and allocate the appropriate resources, including time to ensure you have a robust reporting system in place.