The European Union’s DAC6 directive requires financial institutions to report specific cross-border arrangements to their national tax authorities. This can be a complex task, requiring careful identification of reportable arrangements, data collection, and accurate reporting.
This blog post describes a successful collaboration between ABC, a leading Swiss Private Bank, and Avaloq, a wealth management software provider, to implement a solution for DAC6 reporting using Fitax, a regulatory reporting tool.
The Challenge
ABC needed a way to efficiently and accurately identify reportable transactions under DAC6 (Hallmark 1b), collect the necessary client and transaction data, and generate compliant reports for submission to the German tax authorities.
The Solution
ABC leveraged Avaloq, its core banking system, and Fitax to streamline the DAC6 reporting process. Here’s a breakdown of the steps involved:
- Cross-functional Collaboration: A team of tax experts, operations personnel, and IT specialists from ABC collaborated to define the reporting requirements and identify the data needed from Avaloq and other internal systems.
- Data Extraction and Transformation: Avaloq stores client and transaction data relevant to DAC6 reporting. This data was extracted and transformed into a format compatible with Fitax.
- Fitax Configuration: Fitax was configured to match ABC’s specific reporting requirements and integrate seamlessly with Avaloq.
- Automation and Efficiency: The Avaloq-Fitax integration automates many aspects of DAC6 reporting, reducing manual effort and the risk of errors.
- User-Friendly Interface: The Fitax solution provides a user-friendly interface for ABC staff to review and finalize DAC6 reports before submission.
- Regulatory Compliance: The integrated Avaloq-Fitax solution ensures that ABC meets all DAC6 reporting requirements and deadlines.
The Benefits
ABC’s implementation of Avaloq and Fitax for DAC6 reporting has resulted in several significant benefits:
- Increased Efficiency: Automating data extraction, transformation, and reporting tasks saves ABC significant time and resources.
- Enhanced Accuracy: Automating manual processes reduces the risk of errors in data collection and reporting.
- Improved Compliance: The integrated solution ensures that ABC adheres to all DAC6 reporting regulations.
- Reduced Costs: Streamlining the DAC6 reporting process reduces the overall cost of compliance.
Conclusion
By leveraging Avaloq’s robust data management capabilities and Fitax’s regulatory reporting expertise, ABC has successfully implemented a DAC6 reporting solution that is efficient, accurate, and compliant. This collaboration demonstrates the power of integrated technology solutions in meeting the challenges of regulatory reporting in the financial services industry.
Contact me for your Regulatory Reporting and Avaloq projects, I will be happy to discuss with you !