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Global Tax Forum Serves up Discussion on Implementation Issues, Hamburgers and Donuts
Nardeo Ganesh, DTCC Vice President, Settlement & Asset Services, listens in on the panel discussion about the Internal Revenue Code 305(c) at the DTCC 2015 Global Tax Forum.

The Depository Trust & Clearing Corporation’s (DTCC) 16th annual Global Tax Forum featured discussions ranging from the latest developments in foreign and domestic tax laws, including the unique tax implications behind the recent completed $11.0 billion merger of U.S.-based Burger King and Canada-based Tim Hortons.

The 130 DTCC clients in attendance heard presentations from industry experts representing leading banks and financial organizations on how firms are approaching tax issues such as the collection and management of legal entity data and tax documents, Foreign Account Tax Compliance Act (FATCA) reporting, cross-border taxation, intergovernmental agreements, withholding, and reporting challenges.

The half-day program, held at India House in lower Manhattan, was sponsored by DTCC’s Settlement & Asset Services’ Global Tax business. “When we started this forum in 1998, we had no idea it would become such an industry event,” said Dan Thieke, Managing Director and Head of Settlement & Asset Services. “It’s grown into an opportunity for clients to not only network, but to share latest developments on these important tax issues that affect all our businesses.”

Internal Revenue Code 305(c)

The first panel, featuring Lucy Farr, Partner, Davis Polk & Wardwell, Ellis Levy, DTCC Vice President - Tax Counsel, Nardeo Ganesh, DTCC Vice President, Settlement & Asset Services, and Michael Walls, Executive Director, Ernst & Young LLP - Financial Instruments Tax Solutions, discussed IRC Code 305(c) and the implications and operational difficulties of identifying and processing of deemed dividends to holders of convertible securities and warrants.

During the discussion, Walls stated that many large custodial banks and funds have asked accounting firms to assist them in determining the potential exposure that they or their clients may face with regards to U.S. tax withholding and reporting risk.

Whoppers and a Medium Double-Double

The second panel, featuring Christopher Steeves, Leader of Global Tax Practice at Fasken Martineau DuMoulin in Toronto, Ian DeSacia, DTCC Director, Settlement and Asset Services, and Ellis Levy, presented a timely case study about the merger between two quick-serve restaurants, U.S.-based Burger King and Canadian-based Tim Hortons.

The merger, completed on December 12, 2014, resulted in the formation of the new company, Restaurant Brands International. The panel described some of the unique Canadian and U.S. tax implications that arose during the merger as well as future U.S. and Canadian withholding considerations on dividends for shareholders.

Updates on Clarient, 1099 Reporting and FATCA

DTCC also took the opportunity to provide updates to clients at the forum on its own key initiatives, including one of its newest businesses, Clarient Entity Hub. Clarient, launched by a consortium of banks in 2014, streamlines interactions between providers and consumers of reference data while delivering more reliable and actionable content. Clarient provides a tax offering that currently supports U.S. tax requirements but will eventually expand to cover non-US jurisdictions, so asset managers and clients can use Clarient to manage the end to end tax content requirements.

Vincent McNeece, Senior Director of Tax Data Services at Broadridge, discussed challenges associated with 1099 and cost basis reporting.

Nicole Tanguy, Director and Tax Counsel, Citigroup, presented updates on FATCA Reporting, which requires foreign financial institutions (FFIs) to disclose to the IRS information about accounts held by U.S. taxpayers or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.

Brett Lewis, Director, Globe Tax Services, Inc., presented about some of their system enhancements, as well as market updates from Russia, Sweden, Norway and Mexico.