In the intricate world of investment management, maximising returns is key, and that includes ensuring you’re not missing out on potential reclaims of foreign withholding tax.
We’ve identified five crucial elements often overlooked by institutional investors in their withholding tax recovery process. Let’s delve into each one:
1. CJEU Reclaims: Unlocking Opportunities in the EU
Court of Justice of the European Union (CJEU) case law offers a pathway for reclaiming additional withholding tax.
However, these reclaims are not straightforward. They require a detailed comparison of your collective investment vehicle or pension fund with a local equivalent fund to justify the preferential tax treatment.
CJEU reclaims require tax technical comparability analyses compiled case-by-case. This means they often fall outside the scope of standard withholding tax reclamation plans; unless you are engaging a withholding tax recovery specialist, it is unlikely that you are maximising reclaims in terms of CJEU precedent.
WTax specialises in navigating this complex landscape to ensure you’re not missing out on potential reclaims. One third of all reclaims in our submission history have been CJEU reclaims. We are actively tracking emerging case law and constantly evolving our arguments for CJEU reclaims and similar domestic law reclaims from Austria, Finland, France, Germany, Italy, Poland, Portugal, Spain and Sweden.
2. Reclaims in Emerging Markets: Seizing Opportunities
Emerging markets present unique challenges for withholding tax reclaims, often presenting particularly complex processes to navigate.
Many providers do not offer services in these markets due to their complexity. WTax, however, is at the forefront of reclaiming withholding tax from emerging markets like South Korea and Taiwan.
In fact, over 6% of all reclaims we’ve submitted have been to South Korea and Taiwan.
3. Outsourced Admin: Simplifying the Process
Handling withholding tax reclaims can be a time-consuming process, often burdened with paperwork and administrative tasks.
We’ve consistently found that investors were foregoing material amounts of unrecovered withholding tax due to the considerable paperwork involved and the complexity of completing forms in foreign languages. WTax offers a fully outsourced solution, minimising your involvement and ensuring a smooth process from start to finish.
Provide your information and essential documents just once, and we can fill out hundreds of forms on your behalf. All the documentation we process is completed and reviewed by WTax’s in-house CPAs and lawyers. Our advanced technology and client portal also streamlines document collection, form completion, and follow-ups with tax offices, accelerating the refund process.
4. Transparent Reporting: Gaining Insight
Lack of transparent reporting can lead to missed opportunities.
With our client reporting portal, you gain real-time visibility of your reclaim process, empowering you with a 360-degree view of your withholding tax position. Such transparency is key to helping you make informed decisions and optimise your reclaim strategy.
5. Query Management: Navigating Challenges
Dealing with queries or rejections from tax offices requires swift and efficient handling.
In some jurisdictions, applicants may be given as little as 10–15 days to respond to queried reclaims. If deadlines are missed or queries are responded to incorrectly, investors risk forfeiting their reclaim requests.
Our dedicated queries management team ensures prompt attention to any queries or rejections. Our expertise in query management allows us to navigate the intricate requirements of different tax authorities and jurisdictional legislation. From providing additional documentation to appealing rejected decisions, we’re here to enhance your chances of successful refunds.
How to Capitalise on these Opportunities
Allow us to help you on your path to optimised withholding recovery by following these steps:
- Hand over the administrative burdens to a specialist and focus on your core business activities.
- Track the status of your reclaims in real-time through our client portal, which provides comprehensive reporting and transparency for all reimbursements.
- Experience an enhancement in your fund’s performance upon receiving refunds.
Conclusion
Withholding tax reclaims represent a significant opportunity for institutional investors to enhance their returns. By partnering with WTax, you can unlock the full potential of your withholding tax recovery process, ensuring you’re not missing out on crucial opportunities.
From navigating complex CJEU reclaims to seizing opportunities in emerging markets, we’re here to support you every step of the way.
Get in touch with us today to learn more about how we can help alleviate your administrative burden and optimise your withholding tax recovery process.
