Xceptor Tax Hub – An Operational Tax Platform

Operational tax activities such as tax reclaim are a core part of a custodian’s service offering; the ability to offer an enhanced service in this area can be the critical factor between winning and losing new business for the whole of the custody product offering.

However, this complex area is very difficult to get right, and is fraught with challenges. Many banks still perform the majority of tax reclaim activities manually, including: gathering and validating information about the beneficial holder, calculating and applying the correct treaty rate, filling out reclaim forms, along with any supporting documentation, filing the reclaim with the relevant authority, and finally reconciling any received funds against the original claims.

Many of these operational tax activities are time sensitive, with significant financial penalties if the time limits lapse. Additionally, individual reclaims are often open for an extended period of time until the refund has been received, making it difficult to track progress and  making it more likely that something will be overlooked or missed entirely.

Xceptor Tax Hub has been designed to provide an enhanced operational tax product that digitises and manages each constituent part of the process within an intuitive and easy to use platform. Xceptor manages both relief at source and tax reclaim processes, adding automation steps wherever possible to assist the processing of each claim.

Tax reclaim process flow diagram

Operational Tax Reclaim Process

Automation – Benefits

  • Automatic consultation of tax rules and treaty tables to formulate withholding tax rates, and to determine the appropriate course of action for each income event in each market – i.e. can relief at source be applied, and if not, what type of reclaim must be lodged.
  • Application of eligibility rules in each market to determine document requirements, and to ensure that each beneficial holder meets those documentation requirements e.g. powers of attorney, residency certificates, beneficial holding statements.
  • Automated document management processes, including automated chasers for missing or incorrect documents, ensuring that all client documentation is up-to-date ahead of time.
  • Automated reclaim calculations, driven by flexible business rules that allow the organisation to respond to changing treaty and market information.
  • Management and lodging of all tax reclaim forms and documentation with the relevant authority, with the ability to monitor workflow status throughout their lifecycle.
  • Reconciliation of payments received by tax authorities with the internal record, and lodging of the payment with the internal accounting systems.
  • Creation of a range of management dashboards and reports to monitor and control reclaims, including cash-flow analysis and operational performance. Customer service dashboards allow clients to get a real-time view of their own reclaim status.

Xceptor Tax Hub’s unique capabilities make it the ideal choice for creating an enhanced operational tax platform, allowing global custody and direct custody tax operations to be serviced from the same platform, providing greater levels of control and oversight over dispersed global operations.

For more information, see our Xceptor Tax Hub Brochure,  or read our Northern Trust case study.