The Spanish Senate has given its final approval to a bill that introduces a tax of 0.2% on the purchase of shares in Spanish listed companies with a market capitalization in excess of 1 billion Euros. With implementation of this new Financial Transaction Tax (FTT) in January 2021, financial institutions have just three months to update their internal systems to meet the new requirements.
Historically banks have operated in silos, their tax operations following suit. With the introduction of the French and Italian transaction taxes, many houses implemented tactical solutions, adapting these workarounds to accommodate respective rule sets. But with Spain’s new rules heaping further pressure on already stretched tax operations teams, this piecemeal approach is simply not scalable. And, with Hungary and Portugal considering their own FTTs, Germany leading a 10-country push for an EU-wide tax, and regimes around the world looking at FTTs as a potential source of funds to replenish budgets ravaged by the global pandemic, tax operations chiefs look set for more than a few sleepless nights.
It’s time to take a strategic approach to tax operations. Banks need to be able to process and manage large and often disparate streams of data from across the entire organization. They need to digitize and centralize this data so that they can apply deep dive analytics to ensure that they are able to comply with specific tax rules. And, with an increase in the number of instruments in scope, they need a solution that is both performant and scalable.
To find out how we can help you with your tax management requirements, please get in touch at MeritsoftCapMarkets@cognizant.com.