This event was aimed at investment firms and the fund industry and provided deeper insights into and prompted discussions about fund structures and the future UK funds regime, trying to predict future tax developments and digging deeper into the practical benefits and potential disadvantages of new investment vehicle classifications.

International regulatory and substance requirement developments were explored. OECD Pillar Two requirements and exemptions for firms in larger consolidated group structures constituted the main discussion topics. Authorities’ greater focus on shell companies was also debated and it was concluded that there are still many uncertainties regarding the expected approaches of different authorities to this topic. There was a lively discussion about the difference between the taxes of the UK and those of Luxembourg, especially in terms of complexity. With regard to that aspect, the debate showed clearly that Luxembourg, with its straightforward and very simple tax rules, was favoured by most participants.

Managing changes to tax risk and governance was a big issue at this conference, as it is at many other tax conferences, too. How to anticipate regime changes and implement a forward-looking process was identified as one of the biggest challenges of the industry these days. Embedding proposed frameworks into current processes and monitoring tax risk profiles while aligning them with those of the whole company – paired with the question how to shape the tax team and skill set to cope with stricter compliance obligations – was seen as an extremely challenging and time-consuming task in all organisations.

An international outlook on withholding tax developments was discussed in one of the most interactive panel discussions with participation of Susanne Rauscher-Nwokedi from SDS. The analysis of a future harmonisation of the EU withholding tax regime – followed by an exploration of European Commission proposals and potential challenges of implementation – raised a discussion about the need for such a harmonised regime. The main question was how to capitalise on EU withholding tax reclaims. A broader debate was sparked on TRACE and its implementation successes and problems. It is obviously still necessary to convince the various actors on the market that a harmonised EU withholding tax regime is for the benefit of all stakeholders – individual investors, the financial industry as well as tax authorities.

The industry is seriously concerned about how to cope with an increased number of audits and authority scrutiny since authority investigations are becoming more frequent and more detailed. Thus, finding solutions to compliance issues and control failures by raising risk awareness of capital gains and transaction taxes has become of paramount importance for the industry.

There is a consensus in the industry that for emerging challenges related to tax data and documentation, technological support is inevitable and invaluable. Coping with increased scrutiny and the question how the automation of tax processes and the increasing reliance on technology can be beneficial are the predominant issues the industry is dealing with. Establishing internal consistency and transparency of data in order to cope with additional reporting and compliance requirements is the prerequisite to ensure internal data verification and consistency.

During the last conference session, which was organised as a “fireside chat”, panellists looked ahead to regulatory developments that financial institutions should be aware of and discussed amendments and the expansion of tax information exchange regimes, including the Common Reporting Standard (CRS), solutions to potential challenges of the Crypto-Asset Reporting Framework (CARF) and developments in Blockchain. At the end, the panellists expressed their wish for the establishment of the UK to become an attractive prospect for investment funds following Brexit.

CONCLUSION

This conference gathered high-profile industry experts from the fund industry and gave a broad overview of the current and expected developments and challenges the fund industry is already facing and will have to deal with in the future. Currently, the industry is facing a lot of uncertainty and its perspectives are strongly dependent on finding a way to cope with a higher number of audits and more authority scrutiny. One of the ways is the increased use of technology for collecting and validating data and preparing it for reporting in an automated way by means of standardised applications and intelligent data processing including the utilisation of artificial intelligence (AI). All attendees agree that this is anything but a simple task and will tie up many resources that will be missing for operative work.

Observation by:
Hrvoje Kajzer

Feel free to contact me at any time for further information, an expert chat or a discussion about any of the above-mentioned topics.

The event was aimed at financial services professionals keen to engage in and learn more about the most important developments in the tax industry. The conference provided a fantastic opportunity to take part in debates and discussions with the most qualified and knowledgeable professionals.

The conference consisted of a series of four webinars held Monday through Thursday and a networking event on Thursday evening, culminating in the in-person conference on Friday.

Four webinars during the week covered some of the topics currently most discussed:

• The Great Tax Resignation picked up on the topic of attracting and retaining specialist tax staff by designing new career paths to make the workplace more inclusive, personally satisfying, and adaptive in order to meet the challenges brought about by digitisation, globalisation, and sustainability.
• In Tax, Tech, what’s going on? panelists discussed the challenges for the industry caused by the exponential growth of digital asset investment as well as new challenges for global tax authorities.
• In the webinar Digitising WHT Reclaims, the panel including Susanne Rauscher-Nwokedi from SDS covered topics related to digitising the withholding tax reclaims with a look at the EU’s withholding tax relief system and a review of the implementation of the OECD TRACE regime in Finland.
• The webinar O Tax, Where Art Thou? provided an overview of tax as a topic at the top of the agenda worldwide, driving decisions on policy, trade, strategy, and sustainability, with tax leaders facing new challenges such as rapidly changing compliance obligations and the necessity of contributing to the ESG agenda.

On the morning of the conference day, we observed a bit of a rush hour feeling at the registration desk, where a crowd of attendees, speakers, and panelists came to pick up their name badges.

The opening words were spoken by Ali Kazimi of Hansuke, who welcomed all attendees and especially the main sponsors WTS Global and SDS.

The aim of the conference – with most sessions being held as panel discussions rather than classic lectures – was to encourage the audience to ask questions, comment on what was said in the panels, and actively engage in the discussions, which was successfully implemented during the entire conference day.

The sessions of the conference were very much influenced by current events and affairs, thus again covering the cum-ex affair, which was named the single biggest destroyer of trust between financial institutions and tax authorities. In this case, everything failed – from internal controls and compliance within financial institutions and external auditors (Big Four) to regulators and tax authorities. As a matter of fact, this had and still has a huge influence on policies and the scrutiny of all tax authorities and regulators.

Since the loss of trust is seen as a direct consequence of the cum-ex affair, several sessions tackled the question of restoring trust in the system with topics around audit failures and audit reforms, ESG challenges, the break-up of the Big Four, wealth tax, etc.

Two exciting topics with enormous audience participation were global tax management and the question of how much tax transparency really exists. When talking about tax transparency, you cannot avoid discussing international reporting regimes implemented in the last decade, such as FATCA, AEOI, Common Reporting Standard (CRS), MDR, DAC 6, etc., and all other regulatory and reporting obligations which financial institutions have today. However, it turned out that the crucial question is not whether you have your regulatory reporting process in place and formally fulfill your reporting obligations, but how to deal with those obligations and how to enforce them.

CONCLUSION

• This conference was a gathering of industry specialists, experts, tax authorities, and academics. It provided a comprehensive overview of the current hot topics in the tax industry and the challenges it is facing.
• All the topics discussed in the four webinars, the presentations, and the panel discussions on the conference day are more than challenging for the entire financial industry as well as for the technology providers. However, they are more relevant than ever.
• As a leading provider of software solutions in the area of international tax and regulatory reporting for FATCA, CRS, QI, and OECD TRACE, SDS was delighted to support and sponsor such an excellent industry event.

Observation by:

Hrvoje Kajzer 

Feel free to contact me anytime for further information, an expert chat, or any discussion about the topics mentioned above.

The conference marked the beginning of the return to onsite events and gathered the “hard core” of more than 35 experts in taxation, reporting and digitalisation of tax. The participants were happy to meet old friends, to join in on different conversations and to actively participate in numerous interesting sessions and panel discussions. It was very important for us from SDS to finally meet people in person again, to exchange information with the community about the latest developments and requirements in the operational tax arena and to join expert talks.

On the agenda was a mix of standard tax topics, new tax developments and topics related to the digitalisation of tax and crypto reporting. After listening to the opening words of Peter Grant from KPMG, we enjoyed a very interesting speech by Mark Huyan from JP Morgan. He presented and explained CARF (Crypto-Asset Reporting Framework) and the current status on OECD public consultation in this matter. The talk included a critical review of the challenges in regard to reporting in the crypto world, which is anonymous by design.

The conference proceeded with an overview of the digitalisation of tax, followed by a discussion about current expectations around meeting audit requirements, especially in regard to meeting the new requirements concerning CRS (Common Reporting Standard). Environmental taxes and ESG tax developments across Europe were also part of a short discussion.

The second half of the day was dedicated to OECD TRACE. Katja Pussila from Vero Skatt (Finnish Tax Administration) presented astonishing, positive results from the first year of the TRACE regime in Finland. In summary, individual investors already benefitted exceptionally well from TRACE in the first year alone. This proves that there is no reason not to adopt TRACE throughout the EU. This talk formed a solid basis for the next vivid panel discussion, which featured the SDS tax expert Susanne Rauscher-Nwokedi. She explained how the OECD TRACE initiative could be integrated at EU level and which measures would be needed for such a wide-scale adoption of TRACE.

Conclusion:
From the point of view of SDS, it was a very successful event which enabled us to meet our colleagues from the operational tax community in person and to discuss current and future developments in the tax arena.

Observation by:
Hrvoje Kajzer

Feel free to contact me for further information, an expert chat or any discussion about above-mentioned topics.

Some highlights from the conference:
SDS booth

Panel discussion about the future of OECD TRACE at EU level with SDS panellist Susanne Rauscher-Nwokedi.

Katja Pussila of Vero Skatt (Finnish Tax Administration) presenting the outcome of the first TRACE reporting in Finland this year.

What makes a company successful? A good product on its own will not tip the scales toward success, nor is it the only element in a customer’s decision to buy. A company’s reputation can also influence this decision. Business success requires something extra. Board members, managing directors, executives, and employees are expected to behave in a manner that complies with the legal obligations thus creating essentials such as trust, credibility, reliability, and good reputation.

That something extra also comprises integrity and each employee’s personal responsibility for his or her own actions. In less abstract terms, all these qualities together constitute the company’s value-based culture of compliance. This is a factor that also influences the success of SDS. Business success does not stand above legal obligations nor is it unrelated to morality or integrity. The way SDS achieves business success is at least as important as the very success itself, and the Code of Conduct provides the framework of orientation for this. It combines two essential aspects. All employees are expected to comply with legal obligations and to behave with integrity. For Deutsche Telekom, the Code of Conduct is the combination between internal demands and the promise to outside at the same time. It also ensures that SDS remains a transparent and traceable enterprise for everybody.

The Code of Conduct applies to all SDS-board members, managing directors, executives, and employees of the Deutsche Telekom AG worldwide.

After more than a decade, DLT is gradually arriving in the financial industry. This time period does not come as a surprise: Other significant technological innovations such as computerised bookkeeping, decentralised systems (LINUX), cloud or digital KYC procedures have also taken some time until they were sophisticated enough to be used on a large scale in the financial industry.

There are two aspects of distributed ledger technology (DLT) that make its acceptance and distribution in the financial industry difficult: Firstly, DLT-based solutions tend to (at least partially) lever out the current market infrastructure and organisation, which leads to uncertainty in organisations or even to resistance of individual market participants. Secondly, the technology is difficult to understand and partially requires sound mathematical thinking skills. To the best of the author’s knowledge, there is no simple yet convincing explanation for the functioning of a blockchain, so there still remains a certain distrust of the technology among many people. Simultaneously, the lack of comprehension of DLT’s features repeatedly results in inadequate suggestions regarding its usage. The first decade in the life of DLT has not been free of problems either. There have been software errors, financial losses, conflicts within the community and legal problems. All of these issues show that DLT is not spared from the natural maturing process of a new technology either.

The new SDS white paper reflects the most discussed topics in the specialist area of financial institutions and in financial IT.

SDS GEOS: The high-performance solution for global securities and derivatives processing.

With SDS Managed Services, SDS assumes responsibility for the operation of SDS solutions on an own infrastructure and offers a comprehensive service offer corresponding to agreed-upon service level agreements.

With SDS Managed Services, SDS assumes responsibility for the operation of SDS solutions on an own infrastructure and offers a comprehensive service offer
corresponding to agreed-upon service level agreements.

Ali Kazimi, Managing Director of Hansuke, welcomed delegates and opened the conference with remarkable words emphasising the positive and confident tone and mood of the 2021 conference.

The conference started with a panel discussion about withholding taxes across Europe, where experts drawn from technology, consulting and investment management industries supplemented by trade association and tax authority perspectives explained the latest taxation developments to ameliorate the reclamation processes. The discussion focused on the beneficial ownership challenges, reclaim restrictions post Cum-Ex, the growing demand for standardisation of EU tax relief systems and associated costs, and the promise of blockchain solutions. Among the panellists was also one of the experts from SDS, Wolfgang Göb.

The next session brought the headline of the conference “The Future of Tax” on the table.
The expert panellists discussed the current state of affairs in the aftermath of the Pandora Papers, the irreparable damage that tax data leaks are doing to trust in the fairness of the taxation systems and which steps are being taken to fix a broken system. The panel included speakers from tax authorities, financial firms and pressure groups, who considered and discussed the efficacy of tax transparency measures – from enactment to enforcement. Apart from the fact that this is a very specialised subject, it is also a very emotional one because morality also matters in taxation.

The afternoon was dedicated to discussions related to topics around restoring the trust in a society of post-truth, alternative facts, fake news, data leaks and whistle blowing as well as challenges regarding cryptoassets and their taxation.

In general, we experienced a very active communication via the chat function of the virtual conference during all sessions and especially during breaks.

The second conference day started with a panel discussion attended by Paul Tang, chair of the EU Parliament’s tax committee, Will Fitzgibbon, a well-known investigative journalist from the International Consortium of Investigative Journalists (ICIJ), and Abigail McGregor, from LexisNexis UK, about the fundamentals and paramount importance of our tax system. This was followed by a review of the biggest financial leaks over the past decade, including the recent Pandora Papers. It was a very interesting and eye-opening session which provided some incredible insights into preliminary investigation work that resulted in revealing the Cum-Ex files and Pandora Papers.

Apart from all the tax topics that dominated both days, we also heard a discussion about the most recent developments in building an inclusive workplace which touched some very hot current topics like inclusion, physical security and mental health, purpose, racism, sexism, lack of motivation and some other subjects on the list of employers’ expectations.

The OECD’s BEPS project was recognised as a game changer that reshaped the transfer pricing outcome. Subsequently, updates on administrative approaches to avoiding and resolving disputes were provided.

Two afternoon sessions focused on the future of collectives and building Funds On Chain by using distributed ledger technologies.

The final session of the conference was related to the topics around restoring trust. The panellists discussed challenges faced by financial firms active in international business, which includes dealing with offshore financial centres and tax havens.

CONCLUSION:
In my opinion, it was a very successful tax conference which, despite the fact that it was organised as a virtual event, succeeded to gather high-profile tax professionals, representatives of tax authorities as well as solution providers and advisory firms. The quality of all presentations and panel discussions was at the expected very high level. Although it was “just” a virtual conference, there was a lot of interaction during all sessions. I was very positively surprised by very strong activity of the entire audience, since the traffic on the chat channels provided by the event platform was very high on both conference days. This significantly contributed to the quality of all sessions.

Observation by:
Hrvoje Kajzer

Feel free to contact me anytime for further information, an expert chat or any discussion about above-mentioned topics.

On 10 & 11 November the Financial Services Tax Conference will take place virtually in 2021. Over 2 days, 40+ speakers will address a global audience on a range of industry issues in 14 thematic sessions. Pairing leading industry expertise with topics that have great scope for intriguing debate, the conference offers an engaging experience in an intimate conference setting. So does SDS with its exclusive panel discussion on 10 November 2021. Topic: Withholding taxes across Europe (TRACE). Get ready and join the conversation.

We would be delighted to meet you virtually. Register today!