Complexities managing Intermediary Structures Operationally

What makes managing Intermediary Structures challenging?

Having worked in Tax operations since the early 2000s, focusing on U.S. Tax compliance and later FATCA, one of the most challenging and painful areas I encountered was managing intermediary structures.

These complex Intermediary structures involved multiple tiers of ownership, a myriad of underlying beneficial owners, and the complexities of due diligence across varying tax treatments and eligibility requirements.

The process is further complicated by differences in withholding statements, income allocations, and the calculation of withholding and blended rates.

Additionally, the continuous task of managing and monitoring changes in income allocations, tracking movements of underlying beneficial owners, and ongoing vigilance to capture changes in circumstances at every level of the structure made this aspect particularly demanding.

And then comes the tax reporting of these structures.

Industry Feedback on managing Intermediary Structures

After speaking to leading industry contacts, it’s clear that the pains and challenges I faced surrounding IMY structures still exist.

Does your tax operations team continue to find intermediary (IMY) structures challenging?

“IMYs, Non Qualified Intermediarys and Non Withholding Foreign Partnerships were all a pain at my previous institution and Non Withholding Foreign Trusts continue to be real pain here too. Our main challenges are around validating and managing monthly allocation changes, monitoring the movement of underlying investors and beneficiaries, and handling ongoing withholding requirements”

Taxes and Reporting Lead at Global Tier 1 Bank

“We do find IMY structures challenging. I led a meeting last week where we discussed these and transparent entities and the difficulties we have in reconciling and tracking them across the organisation.

Next step is to ascertain what the need is for the enterprise and potentially looking for a solution and using it in NRA areas, hedge fund services, Fund Accounting, Custody etc…”

Tax Transformation at Global Custodian

Does a Solution to Managing Intermediary Structures Exist?

Decades later, the pains and challenges surrounding IMY structures persist—but do they have to? What changes or innovations does the industry need to make this process more efficient, simpler, and streamlined? What would truly make managing IMY structures easier for everyone involved?

After engaging with leading industry contacts, TAINA has gathered comprehensive insights on everything that Tax Operations teams want, need, and must have— when it comes to managing IMY structures.

We are excited to share that the development of IMY 2.0 is underway, bringing significant improvements that will soon make creating, updating, and exporting IMYs in the TAINA Platform easier than ever before. As part of this evolution, we are also enhancing our Intermediary Tools, Digital Withholding Statement Functionality, and Multi-tier Manager to better meet industry demands.

For more information on TAINA’s Intermediary Tools or if you would like to discuss any challenges your company has around managing intermediary (IMY) structures, get in touch or request a demo today.