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Withholding tax: Obstacles and Trends in 2022

Withholding tax (WHT) directly affects a shareholder’s return on investment. Accordingly, certain changes in tax legislation will play a crucial role in wealth management decision-making. Learn more about withholding tax trends in foreign investment taxation and recovery, as well as the most common obstacles encountered.

Why are tax withholding trends important in wealth management?

The relative return that can be recovered from a reclaim is significant when compounded. Given the complex nature of WHT reclaims, investors often get lost in the intricacies of the process – which results in a considerable lost recoverable opportunity. The tax landscape is ever-evolving, and a thorough knowledge of the changes in global tax policies is needed to ensure the best outcome for your investment.

Billions of dollars worth of investments are recorded every year, and that number is continuously growing. Individuals are constantly looking for more ways to ensure that their wealth is maximized. However, a lack of knowledge and understanding of foreign tax office procedures proves to be an insurmountable impediment to their efforts. Accordingly, taking advantage of the necessary resources available to do so, especially abroad, has become critical. It has become essential to understand the tax withholding trends and how they impact your investments.

In fact, the majority of international investors are owed close to 50% of their tax back, but this
money is hardly ever recovered. By understanding withholding tax trends and making use of a withholding tax (WHT) specialist, you could avoid being one of these investors.

Specialists know the ins and outs of foreign withholding tax laws – even when laws change. Let’s discuss some of the common issues faced when trying to recover withholding tax.

5 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 reclaims are admin intensive which makes using a tax recovery specialist 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. 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 certain challenges. Imagine the frustration of having to deal with one local tax authority in their own language, let alone several. This obstacle could be enough for any investor to throw in the towel. Additionally, some foreign authorities require that investors have local representation before reclaiming WHT. When reclaiming through a professional – investors only ever have to deal with us, and in English.

3. Specific Filing

Requirements and Lack of Guidance
The complex nature of tax office filing requirements give rise to many questions. Often the tax authorities that investors deal with don’t give them the answers that they need. 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 all 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 have to be aware of the limited time 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

(ECJ) claims drawback
The ECJ claims process is extremely 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 provide a simple and seamless turnkey solution to the recovery of withholding tax. Our thorough knowledge of both international tax law and foreign tax office procedures ensures that we resolve your specific claims both successfully and in the shortest possible time.
Let Global Tax Recovery help you get your tax back!
Get in contact today!

Note that any information herein is purely informational and is not intended as, nor does it constitute, financial, tax, legal,
investment, or other advice.

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