United States: Tax Transparency Notice

What the client is asked to certify

At onboarding, the client and every controlling person behind it certify each jurisdiction of tax residence and the taxpayer reference issued there. The certification is read against the rest of the file, and a correspondence address, a settlement account or a place of birth pointing somewhere else has to be reconciled before the account opens. A client tells the firm within 30 days of a change in its residence, and the United States entity requests a fresh certification whenever a change of circumstances shows up in the file. A mandate does not open on an unresolved certification, and a certification that cannot be reconciled closes the account.

What is reported, and to whom

Where an entity in the network is a reporting financial institution, it reports the accounts of clients resident in participating jurisdictions to its own competent authority, which forwards the data to the authority of the client's residence. What is reported is the account holder, the controlling persons, the account identifier, the balance at the year end and the gross amounts credited during the year. Reporting is annual and runs to the deadline the local authority sets. A client may ask IGUAKO Capital Americas LLC for a copy of what was reported about it, and the copy is provided.

The local charge to tax

Each domicile has its own charge to tax, its own filing calendar and its own reporting obligations, and the group tax function keeps one return calendar covering all 28.

The United States entities pay federal corporate income tax, Florida and New York corporate income tax and Delaware franchise tax, and they file the information returns the federal tax authority requires for payments to clients, counterparties and staff. Payments of United States source income to non-resident clients are subject to withholding at 30 per cent unless a valid treaty claim reduces the rate, and the coverage team obtains the certification for that claim at onboarding. The United States is not a participant in the common automatic exchange regime; instead, the group's entities outside the country report their United States account holders under the intergovernmental arrangements their own jurisdictions have with the federal tax authority, and clients are told this when they self-certify.

Transfer pricing on funding, services and licences between United States entities and the rest of the group is documented each year and reviewed by the Group Head of Tax before the return is filed, alongside the returns of the other North America entities.

What the firm will not do

The firm refuses a mandate whose purpose is to hide ownership, income or residence from an authority entitled to know it. It declines a request to invoice a party other than the one that received the service, to route a payment through an entity with no part in the transaction, or to describe a distribution as something it is not. Contracts with introducers, agents and other associated persons carry a clause forbidding facilitation, a right to ask how the work was done and a right to end the appointment on notice. The firm gives no tax advice, and the team in Palm Beach says so in writing before the first mandate is signed.

A structure that works only because a tax authority cannot see it is not a structure the firm will build. Where a client wants a view on its own position, the firm asks it to take that advice independently and records on the file that it did so.