Operational taxes in financial services
Operational taxes in the banking, insurance and funds industries.
Perhaps at no other time in modern history has the insurance industry faced greater challenges. Costs of claims continue to rise significantly, and when combined with intense competition and falling premium volumes this has led to a significant drop in market profit in recent years. In addition to this, increased regulation has raised the cost of compliance, which is further amplified by the consequences of non-compliance. The necessity of managing operational taxes has never been as crucial as it is in the current environment.
The last few years have been a time of unprecedented challenges for those in the banking industry. However, adversity can, in many instances, provide the impetus to re-evaluate and improve upon current practices. One area in which global banking institutions may seek to improve efficiency is in the management of operational taxes. By gaining control over the management of these taxes and the associated reporting obligations a financial institution can turn a significant financial and reputational risk into a distinct competitive advantage.
The Irish funds industry prides itself on the vast expertise of its service providers and the ability to effectively meet investor needs. With assets under administration of €1.9 trillion in over 11,000 funds (domiciled and non-domiciled), the opportunities for Irish and foreign investors are wide ranging. However, the importance of an opportunity is knowing the “threat” that comes with it. Over the last few years, operational taxes have come to the forefront and have been a topic of much debate. With the introduction of more regulatory requirements comes an increased exposure to operational taxes. Therefore there is an evergrowing need to focus on the effect of the various operational taxes regimes on the funds industry.