cash management solutions
DESCRIPTION
Cash Management Solutions. adelante. 1. Cash Conc entration Iberian Cash Concentration Tax Implications Central Bank Reporting Advantages and Disadvantages 2 . Electronic Banking Systems Electronic Banking Systems Standard Formats BBVA Netc@sh. 1. Cash Concentration. - PowerPoint PPT PresentationTRANSCRIPT
Cash Management Solutions
adelante.
1. Cash ConcentrationIberian Cash ConcentrationTax ImplicationsCentral Bank ReportingAdvantages and Disadvantages
2. Electronic Banking SystemsElectronic Banking SystemsStandard FormatsBBVA Netc@sh
Cash Concentration1.
1.- Cash Concentration
ZBAZBA
SINGLE CASH POSITION
PORTUGUESE ACCOUNT
BBVA
SPANISH ACCOUNT
BBVA
Iberian Cash Concentration
1.- Cash Concentration
Iberian Cash Concentration
Allocation of interest
Zero balanceNo interest allocation
Master AccountSpain
Account APortugal
Account BPortugal
Account ESpain
Account DSpain
Zero balanceNo interest allocation
Zero balanceNo interest allocation
Zero balanceNo interest allocation
Zero balanceNo interest allocation
Account CSpain
The Iberian cash concentration system:
Basic characteristics of this structure:•Concentration in Euro currency•All balances, either in credit or debit, are daily swept to the central account in Spain•Funds are transferred automatically entry by entry the following business day but without any value date loss•The result is a single cash position with a single allocation of interest
Iberian Cash Concentration
Key issues to take into account:•Tax implications•Central Bank reporting
1.- Cash Concentration
According to the Spanish law there is a 15% withholding tax on interest payments:
• Concentration with a Resident Company: If the companies have a Consolidated Tax Treatment intra-group relationships are tax exempt
• Concentration with a Non Resident Company: If the company is from the EU, it is free of withholding tax. If it is a non-EU company the specific Double Taxation Treaty should be considered
Tax Implications: Spain
1.- Cash Concentration
Spanish law presumes that any inter-company loan is made on a market basis
Tax Implications: Portugal
1.- Cash Concentration
• It is a 0,04 % tax over the monthly debit balances on loans and overdrafts
• It is paid by Resident and Non resident companies
• Loans for one year between the subsidiaries and the holding companies (SGPS) are exempt
Withholding Tax
• According to the Portuguese law there is a 20% withholding tax on interest payment
•General rate can be reduced if a Double Taxation Treaty exists (e.g. Spain 15%)
Imposto do Selo
Central Bank Reporting
1.- Cash Concentration
There are two possible procedures to fulfill this requirement in Spain:
Obtaining from the Central Bank the NOF and the Statistical Code. Both BBVA and the client have to send monthly reports with all the transactions.
In November 2000, the Central Bank of Spain introduced a new reporting method (42.05.01) for Spanish entities with accounts concentrating their balances into non-resident entity accounts. The client can authorise BBVA to make all the reporting procedures on his behalf.
Both Spanish and Portuguese Central Banks have to be informed of all the movements above Eur 12.500 between Resident and Non-Resident companies.
BBVA in Portugal can make all the reporting on behalf of the client if required: COE “066 Transactions between resident accounts in Portugal and other countries”.
1.- Cash Concentration
Advantages and Disadvantages
• Global and unique position: Cash Concentration matches debit and credit positions
• No value date losses
ADVANTAGES
• Withholding tax: in the interest paid if there is not a Consolidated Tax Treatment
• New account to be controlled and managed
DISADVANTAGES
2. Electronic Banking Systems
2.- Electronic Banking Systems
SWIFT
Operational Services
Information Services
GROUP TREASURY
SPAIN PORTUGAL
OTHER BANKS
BBVA GROUP
BBVA PORTUGAL
BBVA SPAIN
BANKBANKBANK
Standard Formats:Edifact / Swift
Proprietary System: BBVANetC@sh
Standard Formats: Swift
INFORMATION:
• MT940: previous day information• MT942: same day account information
2.- Electronic Banking Systems
TRANSFER OF FUNDS:
•MT101: request for transfer•Agreements signed with many banks
2.- Electronic Banking Systems
Standard Formats: EDIFACT
The demand for international formats (EDIFACT) is covered by both banks in Spain and Portugal where we have implemented the following messages:
PAYMUL (payments)DIRDEB (direct debits)FINSTA (finantial statements)BANSTA (status message)AUTACK(acknowledge message)
BBVA NetC@sh is a multilingual web based solution
2.- Electronic Banking Systems
BBVA NetC@sh provides many services regarding Account Information, Collection, Payment Services, Credit Cards...
Security features:
NetC@sh uses SSL protocol based on a 128 bit key encryption system. This ensures that any information exchanged between your PC and BBVA will not be deciphered by anyone elseVerisign™ is the certification authority which ensures that information remains confidential and tamper-proof while in transit across the Internet
Propietary Solutions: BBVA Netc@sh
2.- Electronic Banking Systems
Propietary Solutions: BBVA Netc@sh
2.- Electronic Banking Systems
Propietary Solutions: BBVA Netc@sh
2.- Electronic Banking Systems
Propietary Solutions: BBVA Netc@sh
Some of the available options are: