The Foreign Account Tax Compliance Act (FATCA) and the Organisation for Economic Cooperation and Development (OECD)’s Common Reporting Standard (CRS) fall within the Automatic Exchange of Information (AEOI) measures being adopted globally.
The overarching aim is to bring transparency, give a full view of taxpayers and identify where further investigation may be needed.
In 2016, Panama and the United States (US) signed an agreement to improve international tax compliance under FATCA. Panama also committed to meet the OECD CRS requirements and needed a solution to gather returns from financial institutions (FIs) and facilitate the transmission of information to the US Internal Revenue Service (IRS).
The DGII needed a technical solution to meet both its first round of FATCA and CRS exchanges and chose the Vizor AEOI Solution to support them through this complex process.
It was one of the first countries to commit to exchange in September 2017 and since that time, it has stayed up to date with any emerging international standards for data exchange, of which there have been many. With many years of experience in SupTech implementation for regulators such as central banks and supervisory authorities, we were able to apply best practice and lessons learned to Panama’s circumstances and ensure that the DGII stays on top of its AEOI commitments.
Another challenge during implementation was the language barrier. While key personnel at the DGII are highly proficient in English, given its utilisation by the FI community, the whole solution needed to be translated into Spanish. This required additional time and close dialogue to deliver exactly what our customer wanted and to ensure that any translation conveyed exactly the requirements of the exchange standards.
The implemented solution included self-registration and account creation for FIs, and extensive validation of FATCA and CRS data against the IRS and OECD business rules, requiring little or no manual interaction with the system. This came alongside the standard features included in our solution such as the ability to upload XML or manual file formats as well as corrected data submissions.
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