Rise of Enforcement

As people begin to return to normal and many of us are returning to office life, regulators are also returning to their offices and looking at tax revenue and how to fund economic recovery.

Many governments are taking a harder look at tax evasion and have set their focus on the institutions tasked with providing the data to regulators. We are seeing stricter enforcement and higher penalties where people have missed reporting on their customers.

Last month we saw articles that highlighted HMRC strict enforcement of failures to report and tax evasion schemes.

Enforcement will take the form of fines for failures to report and late filings, on countries that previously did not have such fines. Additionally, we have also seen an increase in the amount of the fines that were previously assessed.

HMRC has noted that they will freeze assets when fines are not paid or satisfied.

Other recent enforcement updates include:

• Taiwan Ministry of Finance (‘MOF”) announced that they plan amendments to certain provisions of their CRS Regulation. MOF have introduced on-site reviews to validate the correct performance of due diligence.

• The extended administrative assistance request made by IRS to 40 Swiss and insurer companies to disclose the full details of client accounts held by US citizens

It is more important today than ever before, to assess and confirm that you have a proper documentation process in place. The most common issues in reporting stem from overlooked errors in the classifications derived from documentation.

Firms should regularly review and audit their process to confirm that the documentation review process is complete, comprehensive, and executed in line with policies and procedures. Reviews will identify gaps and can help mitigate points of exposure within your process and help you assess the proper problems that exists.

We would love to talk to you more about your current documentation validation process and how our award winning FATCA and CRS Validation platform may add value to your documentation process.

For more information reach out to us or request a demo today.