© 2016 Fair Isaac Corporation. Confidential.

This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent.

Automatic Exchange of Information (AEOI) and

Common Reporting Standard (CRS)

is not just an extension of FATCA

Tax Compliance

Frank HolzenthalFICO TONBELLER

© 2016 Fair Isaac Corporation. Confidential. 2

Siron®AML

© 2016 Fair Isaac Germany GmbH

Werner-von-Siemens-Str. 2 64625 Bensheim, Germany

Phone: +49 6251 7000-0 Fax: +49 6251 7000-140info-tonbeller@fico.comwww.tonbeller.com

All rights reserved.

This document contains confidential and proprietary information. No part of this document may be reproduced, processed or duplicated in any form or by any means, electronic or mechanical, for any purpose, without the express written permission of Fair Isaac Germany GmbH. Any dissemination or disclosure to third parties without the express written permission of Fair Isaac Germany GmbH is strictly forbidden.The information in this document is subject to change without notice. Fair Isaac Germany GmbH assumes no liability for any damages incurred, directly or indirectly, by using the information contained in this document, including any kind of information which is incomplete or incorrect.Siron® is a registered trademark of Fair Isaac Germany GmbH. All other trademarks or registered trademarks referenced are the property of their respective owners.

© 2016 Fair Isaac Corporation. Confidential. 3

Agenda

• Overview CRS AEOI

• Identification, Classification and Workflow

• Reporting

• Comparison FATCA �� CRS AEOI

• Benefits

© 2016 Fair Isaac Corporation. Confidential. 4

Overview CRS AEOI

© 2016 Fair Isaac Corporation. Confidential. 5

Two Components for Implementation

Due Diligence and reporting standards for financial

institutes

Legal Requests

Reporting Schema

Transformation into local regulations

Technical solution

CRS(Common Reporting

Standard)

CAA(Competent Authority

Agreement)

XML Reporting Schema for the bilateral data exchange

Bilateral (multilateral) agreements between countries

to exchange tax information

Establish the administrative and legal issues for governments

Interpretation of CAA and CRS

Specification of rules and regulations

Consistency with national regulations

© 2016 Fair Isaac Corporation. Confidential. 6

Time Line CRS AEOI

2013 2014 2015 201820172016

AprilG5 announce pilot project for a global

FATCA

JulyG20 mandated OECD to

develop a globalstandard for AEOI

FebruaryRelease

CAA und CRS

G5: France, Germany, Italy, Spain und UKAEOI: Automatic Exchange of InformationCAA: Competent Authority AgreementCRS: Common Reporting Standard

MayOECD memberscommit to AEOI

(incl. 13 non-members)

JulyRelease of the

commentaries andreporting schema

OctoberMultinational agreements

signed by the 51 „Early Adopters“

SeptemberApproved by G20

DecemberEU legislation

shall encompass the CRS

JanuaryBegin of new

account opening procedures

DecemberDue diligence

procedures must be completed

for pre-existing high value accounts

DecemberCut-off date for

pre-existing accounts; eventually already collecting account

balances or other data

DecemberProcess for all

customers (incl. TIN) competed

SeptemberInitial automated ex-change of new

accounts and pre-existing high value accounts excl. gross

proceeds

SeptemberReporting for all

customers

© 2016 Fair Isaac Corporation. Confidential. 7

Time Line CRS AEOI

20xx+220xx +120xx

JanuaryBegin of new

account opening procedures

DecemberDue diligence

procedures must be completed

for pre-existing high value accounts

DecemberCut-off date for

pre-existing accounts; eventually already collecting account

balances or other data

DecemberProcess for all

customers (incl. TIN) competed

SeptemberInitial automated ex-change of new

accounts and pre-existing high value accounts excl. gross

proceeds

SeptemberReporting for all

customers

© 2016 Fair Isaac Corporation. Confidential. 8

CRS AEOI Early Adopters (October 2014)

Countries, which have signed the agreement:

(Reporting to September 2017 with 2016 data)

► Albania (2018)

► Anguilla

► Argentina

► Aruba (2018)

► Austria (2018)

► Belgium

► Bermuda

► British Virgin Islands

► Cayman Islands

► Colombia

► Croatia

► Curacao

► Cyprus

► Czech Republic

► Denmark

► Estonia

► Faroe Islands

► Finland

► France

► Germany

► Gibraltar

► Greece

► Guernsey

► Hungary

► Iceland

► Ireland

► Isle of Man

► Italy

► Jersey

► Korea

► Latvia

► Liechtenstein

► Lithuania

► Luxembourg

► Malta

► Mauritius

► Mexico

► Montserrat

► Netherlands

► Norway

► Poland

► Portugal

► Romania

► San Marino

► Slovak Republic

► Slovenia

► South Africa

► Spain

► Sweden

► Switzerland (2018)

► Turks & Caicos Islands

► United Kingdom

© 2016 Fair Isaac Corporation. Confidential. 9

CRS AEOI to be considered

• Tax Residence

• Multinational Agreement/Bi-Lateral Agreement

• Law, not agreement

─ No Registration

─ No Responsible Officer

─ EU directive (Council Directive 2014/107/EU of 9 December 2014 amending Directive 2011/16/EU)

• No Recalcitrant

─ final assignments

─ Self Certification

• Less Classifications

• Reporting Support (plan): Data Exchange Platform

• USA excluded themselves

© 2016 Fair Isaac Corporation. Confidential. 10

Identification, Classification and Workflow

© 2016 Fair Isaac Corporation. Confidential. 11

Solutions support the two areas classification and reporting

Siron®TCR fulfills standards required from regulators: FATCA

Customer Master Data

Trx Handling & Tax Calculation

Reporting

FATCA Classification

FATCA Handling & Withholding

FATCA Reporting

CRM KYC …

IRS Local …

Long-standing successful deployment of comparable

products

Sophisticated scoring and checks

Customizable workflows for case management of alerts

Data integration for computer-based reporting

© 2016 Fair Isaac Corporation. Confidential. 12

Solutions support the two areas classification and reportingTax Withholding is not required

Siron®TCR fulfills standards required from regulators: CRS AEOI

Customer Master Data

Trx Handling & Tax Calculation

Reporting

CRS AEOI Classification

FATCA Handling & Withholding

CRS AEOI Reporting

CRM KYC …

IRS Local …

Long-standing successful deployment of comparable

products

Sophisticated scoring and checks

Customizable workflows for case management of alerts

Data integration for computer-based reporting

© 2016 Fair Isaac Corporation. Confidential. 13

Identification – Classification – Reporting

Customer acceptance, customer base, change of circumstances

Indicia check

Results, customers with indicia

Verification(Case Management)

Archive

Report Form 8966

© 2016 Fair Isaac Corporation. Confidential. 14

CRS AEOI – Identification & Verification

All natural and legal persons with CRS hits are forwarded to Case Management.

Case Management

Workflow for Verification

Check rules

© 2016 Fair Isaac Corporation. Confidential. 15

Identification of Customers

Poste restante or c/o in the foreign country as the only

address

Signing authority for persons with an foreign address

Standing order to a Foreign Country

Telephone numberforeign country (only)

Postal addressPost office box

Home address

Residence(based on e.g. passport, driver’s

License, etc.)

The screening is recommended to be done for all countries and “activated” for those countries that signed a bi-lateral/multinational agreement with the national government.

© 2016 Fair Isaac Corporation. Confidential. 16

Identification Architecture

…CRM

Case Processing

in Case

Management

Administration

ArchiveAudit

Core System

Parameterization Reporting

Workflow Master Data

Case Management

Identification

© 2016 Fair Isaac Corporation. Confidential. 17

Reporting

© 2016 Fair Isaac Corporation. Confidential. 18

Report Management

• 8966 Reporting (National Authority,…)

─ XML-Format

─ Variations are possible (parameterization)

─ Report per country or „all in one“ reports

• Customer Reporting

─ No defined format

─ “Best Practice” Templates

─ Integration in business process (e.g. self certification)?

• Flexible Reporting Framework (Template Approach)

─ Template for Form 8966 as a standard template

─ New Templates can be embedded

─ Data exchange with various recipients

© 2016 Fair Isaac Corporation. Confidential. 19

Reporting data

Reporting Architecture

CaseManagement

3rd Party data(tax information, etc.)

Administration/Template

Archive

Report Management

Configuration Master Data

Preview Export

Reports

Reporting Schema

Siron®TCRIdentification & Classification

© 2016 Fair Isaac Corporation. Confidential. 20

Tax Compliance: One Solution FATCA/CRS Reporting

Report DistributionTemplate DefinitionParameterization

…

Schema8966

Customer Reports

…

Data Filter

Schema1042-S

Document(e.g. pdf)

FTPSFTP…

Report Generator

CustomersNational Authority

© 2016 Fair Isaac Corporation. Confidential. 21

Comparison FATCA �� CRS AEOIDifferences and Similarities

© 2016 Fair Isaac Corporation. Confidential. 22

Similarities FATCA �� CRS AEOI

Indicia to be considered according to the IRS and OECD.

(similar but...)

Citizenship Not relevant

Country of birth To be reported if local authority ask for it

Residence and correspondence address

Telephone number Relevant if one or more phone no.are in a Reportable Jurisdiction and no telephone number in the Jurisdiction of the Reporting Financial Institution

Standing order Standing instructions (other thanwith respect to a DepositoryAccount)

Power of attorney or signatory authority

A “hold mail” or “in-care-of” address

© 2016 Fair Isaac Corporation. Confidential. 23

Differences FATCA �� CRS AEOI

Competent Authority

Agreement

IGA model

1 & 2

(Azerbaijan: IGA1)

No central registration;

No GIIN

All individuals are concerned;

Broader definition;

No wavers

Threshold for individuals

No Withholding Domestic tax authorities;

Many-to-many Jurisdictions;

2 phrase.

Depending on the IGA model;

Mainly to US;

Agreements Registration Identification

Transaction Withholding Tax Calculation

Central registration;GIIN

Withholding Reporting

© 2016 Fair Isaac Corporation. Confidential. 24

Benefits… of a flexible standard solution

© 2016 Fair Isaac Corporation. Confidential. 25

• Flexible & independent…

─ …solution with a flexible country enabling (1st, 2nd, 3rd,… wave)

─ …adjustments/enhancements of check rules, classifications, etc.

─ …data interfaces

• Process & Procedures…

─ …Workflow that can be parameterized by user for efficient verification

─ …for adaptable of business and legal Tax Compliance strategies

─ …to be audit proof

• Features & functions…

─ …that cover all requirements for identification

─ …for a modern scoring approach

─ …for automation and authorization

Tax Compliance: Benchmark – Identification

© 2016 Fair Isaac Corporation. Confidential. 26

• Flexible & independent…

─ …parameterization of report template

─ …customer reporting (e.g. based on variables)

─ …report distribution

• Process & Procedures…

─ …for a template approach to handle all report requests and more

─ …to consider Multi-tenant implementation for various jurisdictions

─ …to be audit proof

• Features & functions…

─ …such a sophisticated report generators including various output formats

─ …for research and report scheduling

─ …to consider all required data in the data import interface

Tax Compliance: Benchmark – Reporting

© 2016 Fair Isaac Corporation. Confidential.

This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent.

Thank You

Frank Holzenthal#49 172 768 29 12frankholzenthal@fico.com