Cash Management
Solutions
adelante.
1. Cash Concentration
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
1.- Cash Concentration
Iberian Cash Concentration
SINGLE CASH
POSITION
SPANISH ACCOUNT
BBVA
ZBA
PORTUGUESE ACCOUNT
BBVA
1.- Cash Concentration
Iberian Cash Concentration
The Iberian cash concentration system:
Master Account
Spain
Allocation of interest
Account C
Spain
Account D
Spain
Account E
Spain
Zero balance
No interest allocation
Zero balance
No interest allocation
Zero balance
No interest allocation
Account A
Portugal
Zero balance
No interest allocation
Account B
Portugal
Zero balance
No interest allocation
1.- Cash Concentration
Iberian Cash Concentration
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
Key issues to take into account:
•Tax implications
•Central Bank reporting
1.- Cash Concentration
Tax Implications: Spain
Spanish law presumes that any inter-company loan
is made on a market basis
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
1.- Cash Concentration
Tax Implications: Portugal
Imposto do Selo
• 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%)
1.- Cash Concentration
Central Bank Reporting
Both Spanish and Portuguese Central Banks have to be informed of all the
movements above Eur 12.500 between Resident and Non-Resident
companies.
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.
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
ADVANTAGES
DISADVANTAGES
• Global and unique position:
Cash Concentration
matches debit and credit
positions
• Withholding tax: in the
interest paid if there is not
a Consolidated Tax
Treatment
• No value date losses
• New account to be
controlled and managed
2.
Electronic Banking Systems
2.- Electronic Banking Systems
Information Services
BBVA PORTUGAL
BBVA SPAIN
Standard Formats:
Edifact / Swift
SPAIN
PORTUGAL
BBVA GROUP
Proprietary System:
BBVANetC@sh
Operational Services
SWIFT
GROUP TREASURY
BANK
BANK
BANK
OTHER BANKS
2.- Electronic Banking Systems
Standard Formats: Swift
INFORMATION:
• MT940: previous day information
• MT942: same day account information
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)
2.- Electronic Banking Systems
Propietary Solutions: BBVA Netc@sh
BBVA NetC@sh is a multilingual web based solution
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 else
Verisign™ is the certification authority which ensures that
information remains confidential and tamper-proof while in
transit across the Internet
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: