First Look: FATCA Reporting Portals Jersey & Guernsey
Mar 1, 2015
Alan Rowe, Sales & Marketing Director at Fusion Systems provides an insight into the similarities and differences between the Guernsey and Jersey Tax Authorities FATCA reporting portals.
With the reporting deadlines for the first year of FATCA reporting starting loom much larger on the horizon, jurisdictions that signed IGA Type 1 Agreements, where they take on board the responsibility for receiving reporting data from Financial Institutions, have been preparing their systems for receiving reporting data. As part of the development of our FATCA reporting product Flyingboat Tax Data Exchange we have been involved in looking at the portals that tax authorities are providing for making submissions to them.
The experience of just looking at Jersey and Guernsey in the first instance has shown quite a differing approach to these e-gov requirements, which will vary the burden placed on Financial Institutions reporting into those jurisdictions.
Jersey’s portal known as AEOI (Automated Exchange of Information) became live at the beginning of February which puts it ahead of many jurisdictions. As would be anticipated all Financial Institutions (FIs) will need to register with each Tax Authority in order to make submissions with the institution’s IRS GIIN number being a key part of the registration. Jersey is no different in this respect and additionally within each institution a system of user management exists allowing multiple users within an FI to be involved in the submissions process, with Administration users having some additional powers. Records of account activity are also maintained.
Report files should conform to the IRS’s FATCA v1.1 XML schema (specification) and is limited to 5Mb – not that size should be an issue given the comparatively compact nature of XML files compared to say a high definition photograph file. Although the standard does allow for a single file to contain multiple reports, in our testing we found that the AEOI system rejects files containing more than one.
Submission method is presently only by single file upload. On selecting the upload a dialogue is presented to the user specifying the Agreement Type, Return Period and a browse button to enable the user to select the return file. On submission the file is validated for conformity to the XML specification. Successful uploads result in a confirmation message being displayed and an email is generated to the user. The email confirms details such as the filename submitted, the agreement and return period, the name of the submitting company and a unique lodgement reference number.
Submission history can be viewed within the portal – a listing of returns with newest on top but is limited to the same information as the confirmation email. It is not possible to drill into the submission file to verify for instance which Reporting Financial Institution it contains or view the file contents. Users of the Jersey portal are going to need to be very careful with ensuring that they have a robust process to control their submission files and the naming conventions used in filing to ensure that a simple mix up of file names does not result in a return being missed or duplicated. Furthermore whilst less likely to be a problem in this reporting year, care must also be taken to ensure the reporting year entered when uploading the file is the same year for which the report file has been generated.
Administration users can delete files up to 30th June 2015. Processes exist for sending replacement files before 30th June. According to the documentation, any file sent after 30th of June will be considered a late filing whether it is a new filing or replacement/correction and may attract a penalty of £250.
Guernsey’s submission portal is called IGOR (Information Gateway Online Reporting) and has been designed at the outset to cover multiple reporting regimes beyond FATCA – UK-IGA, CRS and IRIP. A lead user will register with the portal and then add Organisations as the umbrella organisation(s). Financial Institutions (FI) are then added to the Organisation by searching for the FI by GIIN or name. Once added a process of validation takes place by the Guernsey Income Tax staff, and no submissions can take place until authorised by Guernsey Income Tax. Additional users can also be added to the organisation with the usual style of user management. The portal went live for receipt of submissions from 5th of January 2015.
FATCA Submissions can be made via manual file upload like Jersey, or by machine to machine interface utilising a web service, and files must be formatted in accordance with the IRS FATCA Schema v1.1. That’s about where the similarities end. Making manual submissions is straight forward, the dialogue simply requests that the user specifies which Report type they are submitting – US-FATCA as will be the case this year – and offers a file browse function. Once the file is selected and uploaded it is validated. With a successful upload the system responds with a success screen, provides a receipt number and displays a human readable form of the submission document together with a view of the raw XML file should you wish. This is a great feature as it allows users to be sure that the data they have submitted is indeed the data that they intended to submit. By inspecting the return file the Guernsey system knows which reporting year the report is intended for.
If a file uploaded is not valid the screen displayed the invalid message screen will also include information to help troubleshoot the problem.
To take advantage of the machine to machine interface the organisation retrieves the unique API key from within the Organisation details screens. The API key identifies the organisation when a submission is made electronically. The API allows files to be sent and a receipt is provided for successful submission. Invalid files are also elegantly handled. We have tested this feature extensively in the development of our Flyingboat Tax Data Exchange software and can report that it is working well. The ability to submit data directly from systems such as ours will significantly ease the time to process returns. All submitted reports have a unique ID in IGOR and reports can be viewed and are listed under each organisation with most recent submissions listed first. Reports can be retracted. Icons and colour coding is used to signify current submissions, forwarded submissions and retracted submissions. After submission the user can drill into any submission to read the file providing the user with confidence that submissions are correct. Guernsey’s penalties for late filing allows for an initial penalty of £300 followed by daily penalties of £50 for each day the information remains outstanding.
The interfaces are well organised and the system has a clean look to it.
IGOR Project update notes were published in November containing additional detail. These can be downloaded here.
Both systems provide the required functionality but currently the Guernsey system is more ‘business friendly’. The ability to inspect reports once made will give users reassurance and confidence that they have made no submission mistakes, and the ability to make automated submissions offers the opportunity to make the process more efficient and less time consuming. Jersey’s system goes no further than it needs to and a hazard exists with the potential for file name mix ups in an organisation leading to a filing error which could prove costly.