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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 COM

7

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