Transformation of tax processes and reporting can enhance competitive advantage for brokerage firms.
LAKE SUCCESS, N.Y., May 1, 2012 - Accelerating government regulations, increasing tax reporting requirements, and growing client demands have significantly increased tax compliance risks and costs for brokerage firms. A new paper from Broadridge Financial Solutions, Inc. (NYSE:BR) entitled, “Navigating a Perfect Storm of Tax Complexity”, provides strategic guidance on how brokerage firms can transform their tax processing and reporting models as governments in the U.S. and around the world hunger for tax revenues.
Four distinct factors are converging to create a perfect storm of tax reporting complexity, including more tax reporting detail and backup withholding requirements by governments at all levels; increased demand for tax reporting accuracy, transparency and timeliness; new cost basis reporting requirements; and changes to the Foreign Account Tax Compliance Act.
According to Broadridge, the significant expenses associated with supporting tax processing and reporting – including staff with tax processing experience – has become a standard cost of doing business. With tax reporting costs increasing rapidly, executive management is taking notice and increasingly seeking to redesign their tax processing and reporting.
“The tax reporting process is ripe for transformation,” said Michael Alexander, Executive Vice President & Chief Operating Officer, Broadridge Business Process Outsourcing Solutions. “Complexity and costs continue to increase with no end in sight. This is beginning to lead many companies to take a strategic approach to tax management to reduce risks and costs while positioning themselves for long-term competitive advantage.”
Brokerage firms will continue to bear a growing burden for documenting tax details and withholding proper state taxes. An increasing demand for tax reporting accuracy and heightened complexity is creating an evolution from seasonal to year-round tax management. As this evolution unfolds, there are several best practices to help firms more effectively manage their tax operations, including:
To obtain a copy of the white paper, “Navigating a Perfect Storm of Tax Complexity”, please visit:www.broadridge.com/tax
Broadridge Financial Solutions, Inc. (NYSE:BR) is the leading provider of investor communications and technology-driven solutions for broker-dealers, banks, mutual funds and other corporations. Broadridge’s investor and customer communications, securities processing and managed services solutions help clients reduce their capital investments in operations infrastructure, allowing them to increase their focus on core business activities. With over 50 years of experience, Broadridge's infrastructure underpins proxy voting services for over 90% of public companies and mutual funds in North America and processes on average $5 trillion in equity and fixed income trades per day. Broadridge employs approximately 10,000 associates in 16 countries.
For more information about Broadridge, please visit www.broadridge.com.