But don’t worry, with a bit of thought and preparation, it could be a good sequel like Jaws 2 and not a damp squib like Jaws: The Revenge (Michael Caine, what were you thinking?).
With the first year of reporting under AEoI concluded, we can reflect on what went well (and not quite so well) and what can be done to be ready in 2018.
On a positive note, the feedback from the Isle of Man Government’s Income Tax Division (ITD) is that the overall quality of the data reported appeared to be good, enabling them to exchange reports on time with other countries and without notification of errors on key data. This hopefully indicates that Financial Institutions (FIs) are continuing to learn and develop from previous reporting to fine tune the process.
However, around 25% of reporting FIs missed the reporting deadline, which is a concern for ITD. It was the third year of reporting under FATCA and there was an expectation that FIs should be familiar with the requirements and therefore able to meet the deadlines. It can be expected that ITD is less likely to accommodate late filers this year and going forward, meaning that the penalties that are available for poor or non-compliance could be used.
The overall result is that the information being reported may not perhaps be as accurate as it seemed to be.
Bearing all this in mind, it is as important as ever to ensure that businesses are preparing for their 2018 reporting obligations now and continuing to build on the work done and experience of prior years. By considering what went well and not so well previously, businesses can look to improve their position and be better placed for reporting as a result.
Needless to say that getting the necessary budget, staff, time and infrastructure required is important, but perhaps easier said than done. Information technology remains a critical aspect for the project in terms of getting the necessary information and being in a position to report.
Finally, ITD has recently announced that domestic reporting by FIs and insurers for 2018 can also be performed in a similar manner to FATCA and AEoI reporting. For those impacted, it is worth considering whether this can be done as a consolidated exercise, if this would be advantageous.
Experience suggests that the 30 June deadline will be upon us sooner than expected and there will undoubtedly be a lot to do beforehand. There are always going to be competing demands and priorities within a business, but it is important to get the process started as soon as possible to be ready.
Like Jaws, don’t let AEoI come back to bite you.
Director, PwC Isle of Man
Tel: +44 (0) 1624 689713