KPMG Risk Seminar (with a twist) · 2020-03-28 · KPMG Risk Seminar (with a twist) ... report for FATCA and CRS —Share one profile rather than complete multiple forms that ask

KPMG Risk Seminar (with a twist)

13 December 2017

Towards effective data protectionKPMG Risk Seminar (with a twist)

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13 December 2017

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Document Classification: KPMG Public

© 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

EU GDPR: Myths

Who is the real regulator?

The industry will be fully compliant?

I have ticked security boxes?

I have my contracts reviewed?

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GDPR top challenges - market

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Key takeaways

GDPR has the potential to disrupt your business

It’s more than policies and ticking boxes

Be pragmatic and assess your key risks to protect your crown jewels first!

Technology –enabler for business growthKPMG Risk Seminar

Antony Mancini and Alexandra Reip

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Cost and quality

Reducing costs Consistent

quality

The ‘80/20’ ‘20/80’ rule

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Customer experience

“ The digital revolution allows us to forge new types of relationships with customers, where technology is not only a business enabler but becomes an integral part of the way customers interact with the brand “

Source: KPMG CEOs survey 2017

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People

Source: KPMG CEOs survey 2017

Rank Technology challenges over the next three years

1 Attracting new strategic talent

2 Integrating cognitive technologies

3 Piloting emerging technologies

4 Optimal use of data analytics and predictive technologies

5 Reskilling the current workforce

AML and Tax Compliance solutions

Antony Mancini

13 December 2017

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All for One Customer

KYC

AML

FATCA

CRSSanctions Screening

Due Diligenc

e

ReportingPeriodic Reviews

Classification

Risk Ratings

Verification

Financial Services

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Solution for the Industry

Profile details

Sanction screening

Indicative risk rating

FATCA/CRS classification

Annual reporting

Documentary evidence

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KPMG ID Register - What does it do?

KPMG ID Register allows you to:— Collect KYC data and

information necessary to report for FATCA and CRS

— Share one profile rather than complete multiple forms that ask for similar information

— Comply with the KYC requirements and submit FATCA and CRS reports in multiple jurisdictions

— Secure information in our encrypted and tested service

Some of the ID Register functions include:— Live KYC profile available 24h

to fund administrators & service providers indicated by the user

— Indicative risk assessment

— Ongoing sanctions, PEPs and adverse media screening

— Entity classification for FATCA and CRS

— FATCA and CRS reporting under schemes required by various jurisdictions

KPMG ID Register

Let’s get in touch

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KPMG DDIQKPMG DDIQ aggregates, filters and categorises results for analysis, escalationand review, saving both time and money. The system delivers its results in an easily accessible format with the most importantrisks clearly presented.

Source information suchas corporate registries,ID&V and media sources

De-duplication of adverse media

result(s)

Name of individual or legal entity

General information including addresses and local language names

Sanctions match identified with the highest degree of

confidence

Risks identified including money laundering and

corruption

Specific risk and related media

result(s)

Other noteworthy information

includes indicators of source of

wealth / funds

Natural language processing and sentiment analysis replicates the way humanresearchers conduct research,ensuring quality and consistency

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KPMG Astrus – Enhanced due diligence tool

Efficient use of scarce compliance resources

Documented

âForeign Language Searches

Ongoing Monitoring

Online

Secure

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MI dashboard

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MI dashboard

Questions?

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Contacts

Tony ManciniTax Partner+44 (0)1481 [email protected]

Alex ReipSenior Manager, Advisory+44 (0)1534 [email protected]

mailto:[email protected]

mailto:[email protected]

Requirement to correct (“RTC”)

Jason Laity

13 December 2017

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Requirement to Correct

— Requires taxpayers who have outstanding offshore tax non-compliance at 5 April 2017 to correct position by 30 September 2018

— Non-compliance must — involve an offshore

matter (income, assets or activities outside UK) or offshore transfer (income received or transferred outside UK)

— involve Income Tax, CGT or IHT

— have been committed on or before 5 April 2017

— Behaviour determines periods assessable and penalties - could be 4, 6 or 20 years (not extension to 5 April 2021)

— Penalties 200% (can be lowered but no lower than 100%)

— 50% additional penalty for seeking to avoid RTC

— For serious cases— Up to a 10% asset

based penalty on relevant asset (over £25,000 tax in a year)

— ‘Naming and shaming’ (over £25,000 tax across all years)

— No penalty where taxpayer has “reasonable excuse” for FTC

— Advice disqualified if given by interested person, i.e. participated in avoidance arrangements or for consideration facilitated them

— Also disqualified if advisor did not have appropriate expertise, failed to take account of taxpayer’s individual circumstances or was addressed to, or was given to, person other than the taxpayer

— Correct/Notify HMRC— Take one of the

prescribed actions to ‘correct’ the position with HMRC (e.g. disclose and pay, or enhance disclosure if position uncertain)

— Take further advice— Seek advice from a

non-interested advisor re original advice– this could provide a ‘reasonable excuse’

— If clients choose neither they risk being exposed to FTC penalties if tax liability is established post 30 September 2018

Overview “Failure to Correct” “Reasonable Excuse” Actions Needed

Corporate Criminal Offence (“CCO”)

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Overview of Corporate Criminal Offence

(Only) defenceRelevant body had put in place “reasonable prevention procedures”

to prevent its associated person from committing tax evasion

— “Associated Person” is an employee, agent or other person who performs services for or on behalf of relevant body and associated person must act deliberately and dishonestly

— Where there is a UK tax evasion offence does not matter if relevant body or associated person is UK based or not –offence will have been committed and can be tried by courts of UK. UK nexus only relevant for the foreign tax offence.

Otherwise - guilty of offence

Criminal tax

evasion by a taxpayer (not simply

non-compliance falling short

of fraud)

Criminal facilitation of that

criminal tax evasion by an “associated person” of

“relevant body” acting in that

capacity

— Effective now, but HMRC recognise may be 12-18 month roll out period, but should be “rapid”

— Should by now have at least considered risk assessment

Revised HMRC guidance issued 1 September 2017

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/642714/Tackling-tax-evasion-corporate-offences.pdf

Failure to prevent

from committing the criminal facilitation

act

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Reasonable Prevention Procedures – HMRC’s 6 Guiding Principles

,

Risk Assessment

Risk-based Prevention Procedures

Top level commitment

Due diligence

Communications

Monitor, Report & Review

Assess exposure to risk and document relevant body’s risk assessment and tax risk appetite

Apply proportionate DD procedures in respect of persons who will perform services for on on behalf of relevant body including review

of contractual terms, disciplinary action for breaches, and whistleblowing procedures etc

Policies and procedures should be communicated, embedded and understood throughout the

organisation, and possibly externally

Monitor and revisit preventative procedures and improve where

necessary

Top-level management should be committed to and involved

in preventing criminal facilitation of tax evasion

Identify and apply proportionate measures to

prevent criminal facilitation of tax evasion including common elements in HMRC guidance

UK trusts registration service (“TRS”)

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UK trusts registration service (“TRS”)

— Non public register driven by 4MLD available to “law enforcement authorities”, including HMRC

— Regulations at http://www.legislation.gov.uk/uksi/2017/692/pdfs/uksi_20170692_en.pdf

— Draft (not final) HMRC guidance latest version 22 November https://www.step.org/sites/default/files/Policy/TRS_Guidance_FAQ_-_22_November_2017.pdf

— Penalties in regulations are civil and criminal; guidance says “proportionate” penalty framework will be set out in near future

— “Relevant trusts” include those where trustees are non UK resident if the trustees receive UK income or have UK assets on which it is liable to pay certain UK taxes (IT, CGT, IHT, SDLT, SDRT)

— Trustees of “taxable relevant trust” (i.e. relevant trust in year in which trustees are liable to pay above taxes in relation to UK assets or UK income of trust) must register and disclose

— Revised “guidance” states trustees must register if there is “look through” to assets in underlying company; still needs clarifying re new IHT charges

— Beneficial owners and potential beneficiaries of taxable relevant trusts

— Settlor, trustees, beneficiaries, class in whose interest trust set up, and individual who has control over trust

— “Potential beneficiary” in regulations “Any other individual referred to as a potential beneficiary in a document from the settlor in relation to the trust such as a letter of wishes”

— Note revised HMRC “guidance”— Beneficiary named

separate from class must be disclosed

— Un-named, (and named?), or contingent, and part of class, disclose only when distribution made

— Special rules for EBTs

— Under SA rules, trustees must register by 5 October after end of tax year after liability to IT or CGT first arises

— For 2016/17 no penalty if trust, first taxable in 2016/17, registers and discloses before 5 January 2018

— Deadline for existing trusts (i.e. taxable before 2016/17) extended until 5 March 2018

— In subsequent years, must register and disclose by 31 January after end of tax year

— Notify changes (other than value) or state none, by 31 Jan after end of tax year of change, if still taxable relevant trust

— Apparently trusts wound up before 10 August 2017 may also be excluded, but should be checked

Background Which trusts must register?

Which beneficiaries are disclosed? Timelines

http://www.legislation.gov.uk/uksi/2017/692/pdfs/uksi_20170692_en.pdf

https://www.step.org/sites/default/files/Policy/TRS_Guidance_FAQ_-_22_November_2017.pdf

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Information to be disclosedInformation in respect of trust Information in respect of each

beneficial owner and potential beneficiary

— Full name of the trust;

— Date on which the trust was set up;

— Statement of accounts, describing the trust assets and identifying the value of each category of the trust assets at the date on which the information is first provided (including the address of any property held by the trust) – note not just UK assets;

— Country where the trust is considered resident for tax purpose;

— Place where trust is administered;

— Contact address for trustees; and

— Full name of advisers who are being paid to provide legal, financial or tax advice to the trustees in relation to the trust (subsequently limited to those assisting with registration process only).

— Full name;

— NI number or unique taxpayer reference;

— If no NI or UTR the individual’s usual residential address;

— If that address is not in the UK, either a passport or identification card number identification;

— Date of birth; and

— Nature of individual’s role in relation to the trust.

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Information to be disclosedInformation in respect of corporate trustee (i.e. as beneficial owner)

Information in respect of individual trustee (i.e. as beneficial owner)

— Legal entity’s corporate name;

— Legal entity’s UTR;

— Registered or principal office;

— Legal form of the legal entity and the law by which it is governed;

— The name of the register of companies in which the legal entity is registered; and

— The nature of the entity’s role in relation to the trust

— Full name;

— NI number or unique taxpayer reference;

— If no NI or UTR the individual’s usual residential address;

— If that address is not in the UK, either a passport or identification card number identification;

— Date of birth; and

— Nature of individual’s role in relation to the trust.



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The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

https://www.linkedin.com/company/kpmg-advisory

https://www.linkedin.com/company/kpmg-advisory

https://plus.google.com/111087034030305010189

https://plus.google.com/111087034030305010189

Documents

KPMG Risk Seminar (with a twist) · 2020-03-28 · KPMG Risk Seminar (with a twist) ... report for FATCA and CRS —Share one profile rather than complete multiple forms that ask