Case Study - Tax Compliance (Common Reporting Standards, CRS)



Context

Tax evasion is a global issue and a high priority for governments to identify and ultimately recover undeclared income from individual tax payers. The Common Reporting Standard (CRS), developed in response to the G20 request and approved by the OECD Council on 15 July 2014, calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. It sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions. As at 22 April 2016, over 95 jurisdictions have committed to exchanging information with each other under the CRS. Exchange relationships between jurisdictions are typically be based on the multilateral Convention on Mutual Administrative Assistance in Tax Matters (the “Multilateral Convention”). Where it is not yet possible to rely on the Multilateral Convention and the CRS MCAA to exchange information, jurisdictions may rely on a bilateral agreement, such as a double tax treaty or a tax information exchange agreement.


The Problem

In order for domestic tax authorities to share the required information to be automatically exchanged, they first must obtain this from the financial institutions that they have authority over, who in turn must obtain this information from their clients, which in many cases have not been required to be collected as part of existing customer on-boarding processes.

Many financial institutions have millions or tens of millions clients and even more accounts, and complying with the CRS will require the capturing and storing of customer information and updating core-banking systems with these details to ensure completeness of eventual tax information reporting to domestic tax authorities of in-scope accounts.

In performing the pre-existing account remediation, it is likely that many account holders are unable to be definitively classified, requiring a manual process of obtaining self-certification from these clients.


The Solution

FormsBox can be used to rapidly accelerate the self-certification process by facilitating the bulk creation of self-certification forms directly from a CSV file which pre-populates the form. FormsBox has an in-built end-to-end workflow tool that allows financial institutions to pre-populate forms in a batch process (which can process over 100,000 records at once), issue these electronically to clients and for the client to complete and sign the form seamlessly online, return the form back to the financial institution and approve the final form.

This process is far more efficient and saves significant amounts of time compared with a manual process of posting forms, telephone reminders, waiting for forms to be posted back only to be reviewed and rejected if the client fails to complete the form properly. Our solution also minimises the hassle for the end client, who could be receiving similar forms from multiple financial institutions for different accounts they hold.


A standard CRS form for individual self-certification can be seen below. In this case study we will use a FormsBox Business Account to customize and brand this form for distribution.
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An administrative user signs into their FormsBox business account. This could be any FormsBox Business User defined as an administrator within their FormsBox company account.
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The administrator navigates to the Library and filters the form categories to list only CRS forms, showing the single self-certification form currently available. Click on Get to retrieve a copy of this form.
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Once retrieved, the administrator will find the form copy in their home folder. Click on the form to view and edit.
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The form is loaded and the full suite of editing tools are available.
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Click on the Insert tab to view the toolset. Select Image, and when prompted browse for the logo on your local filesystem to select and add to the form.
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Position and size the logo image as required, and click on the top bar to accept and embed the image.
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Once satisfied with the editing process, click on the Save button to return to your Home folder. Click on the Info button to view the form properties.
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Click on the Publish button. Enter a new description and select the Public Form option to make this form available to all FormsBox users, not just internally to your own company.
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The newly edited form will be stored in the Library for all users to access and utilize.
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This form can now be distributed to external users for completion by clicking the Send button within the Library.
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Alternatively, click on the Schema button in the Library to retrieve the fillable form fields into a CSV file for batch processing and distribution. The CSV file will contain the form code and all relevant fields contained within the form.
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This CSV file can now be populated with bulk data manually, or as an extract from a CRM system.
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Within the folder view of FormsBox, click on Administer and select the Batch tab.
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The Batch view displays all batch processing jobs completed or currently in queue for processing. Click on Submit New and select the completed CSV file containing the bulk data. Click OK.
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The CSV file will be uploaded into the FormsBox Batch Processing Queue for processing and once complete, the status will be shown with the number of records processed (98658).
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Each target individual within the CSV file (Column 2) will receive an email notification to complete the CRS form. All data available within the CSV file will be pre-populated within the form they receive.
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Once the user signs into FormsBox (or signs up for a free account), the new form will be available for completion.
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By clicking on the form name, individuals will be able to verify the pre-populated data, perform edits, annotation and any other actions required.
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Finally, individuals can sign the form using their mouse, an uploaded signature image, or any pointing device suitable.
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Additional supporting documentation can also be attached to the completed form, for example a proof of identification.
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Multiple attachments can be added including images, documents and digital voice memos.
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After clicking the Return button, users can select which attachments to return with the completed form to the originator.
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The originator will receive a notification once the form has been completed and returned for review.
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Sender and reference information is displayed with each completed form to enable easy tracking of documents. A dashboard view of all outstanding and completed forms are also available to administrative users.
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The completed form can be reviewed and accepted, rejected back to the individual with commentary, or escalated to another user for follow-up.
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Associated attachments such as proof of identification can be verified with the completed form.
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