IS IN-HOUSE BA NKING RIGHT FOR YOUR ORG A NIZ ATION?
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© K Y RIBA CORP. 2017
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K Y RIBA COM7
KEY CONSIDERATIONS WHEN IMPLEMENTING
AN IN-HOUSE BANK
When implementing an in-house bank, there are several key considerations to review:
W
hen implementing an in-house bank, tax and
legal should be a part of the conversation
from the beginning planning stages. Topics may
include:
•
Tax impacts in certain countries: local taxes,
thin capitalization, VAT on interest, no capital-
ization required.
•
Transfer pricing
•
Withholding taxes on bank interest is required
in some locations
•
Review of regulatory environment
•
Are payments-on-behalf-of (POBO)
transactions allowed in the country?
•
What will be the treatment on cross-border
payments?
•
What paperwork needs to be in place?
Technology is a key enabler to the in-house bank
process and a TMS is an absolute necessity in
order to track intercompany transactions and
achieve the level of automation needed for an
efficient process. In addition, as in real estate,
choosing an in-house bank’s location is key. De-
pending on the location, there could be potential
tax drawbacks. Locations with a favorable tax
environment should be considered.
Technology
selection
Location
options
Tax
implications
Regulatory
issues