As international tax regulations become more stringent, clients may face challenges in reporting their onshore and offshore assets to tax authorities. Clients may, therefore, request financial institutions to provide tax reports, which consist of tax information like income, capital gains or wealth, in order to assist themselves in filing tax returns according to the respective tax law. Financial institutions may provide country-specific tax reports, which are created based on specific tax treatments and calculation rules of the respective country, or generic tax reports for countries that are not covered in country-specific tax reports offering.
In partnership with BearingPoint, Asian Private Banker delivers the deepest and most innovative study on client tax reporting focusing exclusively on private banks in Asia.
Navigating the global client
Rising interest in tax reporting services. 65% of executives at PBs and IAMs have noticed a rising interest from their clients in tax reporting services over the past two years. 97% predicted that interest will increase over the next three years.
Modern age of the global client. 58% of the client base in private banks and IAMs in Asia are cross-border clients. IAMs/MFOs have the highest percentage of cross-border clients at 68%, while Asia-headquartered banks, ranked lowest among our population, had 46%.
Increasing offerings based on demand. 66% reported that they plan to increase investment in additional client tax reporting services over the next 12 months based on client demand, though the majority do not charge clients fees for tax reports.
Asia lagging behind. Less than a third of Asia Pacific-headquartered banks reported that they have a dedicated client tax reporting team for creating tax reports, compared to European- and American-counterparts, where 60% and 67% have a dedicated tax reporting team, respectively.
Better compliance needed for complex regulations. Only 19% of contributing banks provide country-specific tax reports – which are compiled based on country-specific tax treatments and calculations – there is a high demand for these reports from clients who have diversified their assets in multiple offshore hubs.
More training required. Familiarity with creating client tax reports is significantly lower than familiarity with AEOI/CRS at financial institutions, emphasizing the need for more training, as currently only 33% of firms offer training specifically on client tax reporting.
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The research was conducted independently by Asian Private Banker, but was made possible through the sponsorship of BearingPoint.