Withholding tax (WHT) directly affects a shareholder’s return on investment. Accordingly, changes in tax legislation will play a crucial role in wealth management decision-making. We will explain withholding tax trends in foreign investment taxation and recovery, as well as the most common obstacles that investors encounter.
Why are tax withholding trends significant in wealth management?
When compounded, the relative return that an investor can recover from a reclaim is significant. Given the complex nature of WHT reclaims, investors often get lost in the intricacies of the process. Therefore, resulting in a considerable loss of recoverable opportunity. The tax landscape is ever-evolving, so you need a thorough knowledge of the changes in global tax policies to ensure the best outcome for your investment.
Billions of dollars worth of investments are recorded annually and are continuously growing. Individuals are constantly looking for more ways to maximise their wealth. However, their lack of knowledge and understanding of foreign tax office procedures proves to be an insurmountable impediment to their efforts. Accordingly, an investor taking advantage of the necessary resources available to do so, especially abroad, has become critical. Therefore, it has become essential for you to understand the tax withholding trends and how they impact your investments.
Most international investors are owed close to 50% of their tax back, but this money is hardly ever recovered. Therefore, if you understand withholding tax trends and use a tax specialist, you avoid being one of these investors.
Specialists know the ins and outs of foreign withholding tax laws – even when regulations change. Let’s discuss some common issues faced when trying to recover withholding tax.
The five most commonly encountered obstacles in WHT recovery
1. Admin-heavy processes
2. Language barriers
3. Specific filing requirements and Lack of Guidance
4. WHT reclaim deadlines
5. ECJ claims drawback
1. Admin-heavy processes
WHT recovery can be admin-intensive, making tax recovery specialists all the more necessary. Even if an investor has a thorough understanding of the foreign withholding tax landscape, time, resources and patience are required to ensure that the reclaim comes to fruition. Although, the good news is – by using tax recovery specialists like Global Tax Recovery to navigate the entire administrative burden, an investor can apply their time and resources to what is most important – their business.
2. Language barriers
As you can imagine, dealing with foreign tax authorities across different jurisdictions comes with challenges. Imagine the frustration of dealing with one local tax authority in their language, let alone several. This obstacle could be enough for any investor to throw in the towel. Additionally, some foreign rules require that investors have local representation before reclaiming WHT. Whereas, if an investor reclaims through a professional, they only ever have to deal with us in English.
3. Specific Filing Requirements and Lack of Guidance
The complex nature of tax office filing requirements gives rise to many questions. Often the tax authorities that investors deal with don’t give them the necessary answers. In many cases, they expect the investor to do all the work – from checking eligibility and submitting the claim to answering queries and following up on payouts. Global Tax Recovery procures, completes and submits the relevant reclaim forms to the tax office along with all the necessary supporting documentation.
4. WHT reclaim deadlines
Did you know that your WHT reclaim window is limited? Investors must note the limited period after dividend payments are made within which the reclaim may be initiated. Professionals know exactly when you can claim – leave it to us.
5. European Court of Justice
The ECJ claims process is complex, leading to an increased risk of tax leakage. Global Tax Recovery’s team of tax experts understand the ECJ requirements and can assist wherever a recoverable opportunity may be applicable.
How to ensure an efficient, hassle-free withholding tax recovery process
Global Tax Recovery provides a simple and seamless turnkey solution to the recovery of withholding tax. Our thorough knowledge of international tax law and foreign tax office procedures ensures that we resolve your specific claims successfully and efficiently.
Let Global Tax Recovery help you get your tax back!
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Note that any information herein is purely informational and is not intended as, nor does it constitute, financial, tax, legal,
investment, or other advice.
