Tax Compliance Agency Services for Issuers
Acupay has been entrusted by issuers to serve as tax compliance agent on nearly U.S. $325 billion of debt, hybrid securities, preferred shares, commercial paper, and equities. The types of securities overseen include fixed and floating rate fixed-income; extendable short-term notes; preferred shares; American Depository Receipts (ADRs); medium-term notes (MTNs); Euro Commercial Paper (ECP); and U.S. Commercial Paper (USCP).
We typically begin working for our issuer clients in the pre-issuance phase of a security offering, introducing tax certification and compliance procedures into the deal documentation and examining the procedural documentation (and related disclosures) to ensure full compliance with all legal and regulatory requirements. We then translate these requirements into operational procedures for financial intermediates--working closely with clearing systems like DTC, Euroclear and Clearsteam while also making sure that all necessary mechanics are reflected in the Acupay System (www.acupaysystem.com).
We work with the issuer, issuer’s counsel, the dealers and bookrunners, their counsel, as well as the clearing systems and investors’ custodians. We ensure that the need to comply with domestic tax laws does not infringe primary sales or secondary market trading and that all parties along the custody chain are aware of and comfortable with the tax compliance procedures.
Our involvement extends throughout the life of the securities. We work closely with custodians, depositaries, and investors to ensure that the end investors receive the maximum amount of income to which they are entitled, as quickly as possible. We use our electronic links and personal relationships with depositaries and custodian banks around the globe to ensure that “no investor is left behind” and that all investors receive the correct tax treatment.
Acupay is unique in the field of tax relief in that the majority of tax relief attained for investors via Acupay is attained “at-source.” We have created innovative communication systems with national tax agencies worldwide to provide the most effective and efficient tax relief process possible. However, should an investor or custodian have missed the relief-at-source window, Acupay is also able to support reclaiming any due amounts directly from the appropriate tax authorities. To learn more about Acupay’s reclaim services, please review the additional information in the Investors section.
Fixed Income Tax Compliance Services
Acupay’s fixed income tax compliance services help cross-border investors clear the hurdles created by government tax agencies when principal or interest crosses frontiers by collecting the investor information on behalf of the issuer’s tax agency, which is required by law or regulation. This tax data is collected through the custodial chains that connect the investors with the issuer of the securities. The Acupay System is directly connected with more than 2,200 ICSD and CSD accounts of Euroclear, Clearstream, DTC (U.S.), the National Bank of Belgium, CDS Clearing (Canada), ASX Austraclear (Australia), KSD Clearing (Korea), Monte Titoli (Italy) and others.
Acupay’s fixed income tax compliance services enable foreign issuers to tap markets that they would usually not have access to, thereby assisting issuers to reach a broader group of investors.
For instance, the Japanese Samurai market is considerably bigger than the Euro-Yen market. This is because of Japanese legal constraints that restrict foreign custody arrangements for many of the biggest Japanese funds. And just under half of all U.S. investors either cannot or do not employ non-U.S. custody arrangements for most asset types. In situations like this, Acupay can help issuers tap into foreign domestic markets by ensuring that investors do not suffer from double taxation.
The Acupay fixed income tax compliance services conform to OECD principles by relying on KYC principles and supporting paperless tax certification in all cases where domestic laws allow it. Acupay’s principles are also in line with the principles of the ECB’s Target to Securities (T2S) in the sense that it reduces the fragmentation of markets by supporting the creation of more international connection points.
We are highly respected practitioners in the field and adhere to the highest and most stringent security and data protection levels.
Tax Compliance Services for Equities and Depositary Shares (incl. ADRs)
Over the past decade, Acupay has worked with several depositaries and issuers to facilitate tax relief for the holders of depositary shares. Acupay has always been ahead of the curve in terms of facilitating how tax relief on DRs is obtained and how quick that tax relief can flow to the investors. For instance, the Acupay-powered BBVA ADR was the first Spanish ADR whose ADR-dividend was paid at treaty rates at source for all certified U.S. tax resident holders.
Country Tax Compliance
Acupay has developed solutions for tax compliance with the laws of many markets including Belgium, India, Israel, Italy, Poland, Portugal, Russia and Spain. Acupay can support issuances into various domestic markets like the U.S. (Yankees), Japan (Samurais), Hong Kong (Dim Sums) and Canada (Maples). For examples of tax relief systems and procedures in some sample markets, please go to: