The Power of Data Consolidation in Asset Management & Withholding Tax Recovery

For asset managers working with multiple custodians, data fragmentation presents a significant challenge—one that affects not just operational efficiency but also the ability to maximise withholding tax recovery. Each custodian provides data in different formats, through separate portals, and at varying levels of detail. As a result, firms often struggle to gain full visibility into their portfolio positions and, critically, their tax exposures and reclaims.

While many asset managers have already adopted solutions to aggregate and reconcile custodian data, these tools often focus on investment reporting rather than withholding tax recovery. Without a consolidated, tax-specific approach, firms risk missing out on reclaim opportunities, miscalculating exposures, and facing unnecessary delays in the recovery process.

By working with a specialist in withholding tax recovery, firms can gain a clearer view of their reclaimable tax while ensuring that their tax recovery process is handled efficiently and accurately.

Three Challenges with Managing Withholding Tax Across Multiple Custodians

1. Fragmented Custodian Data Creates Blind Spots in Tax Reclaims

Each custodian delivers reports in its own format, often with limited or inconsistent detail on withholding tax deductions. Some may provide a full breakdown, while others simply list net income received. Without a standardised overview, asset managers may struggle to:

• Identify reclaimable withholding tax across all jurisdictions
• Track deductions at the correct rates for different securities
• Ensure all necessary documentation is available for reclaims

As CitiBank notes on the topic of receiving data from multiple custodians:

“While consolidating disparate data from multiple providers is possible, it is also very time-consuming… [those] with multiple custodians have to rely on manual consolidation of the reports they receive. This is a laborious exercise of gathering, inputting, and standardizing, which is prone to human error.”

This challenge becomes even more critical in the context of withholding tax recovery, where errors or missing data can result in failed or delayed claims. Even when firms attempt to consolidate this data manually, they may lack the necessary tax expertise to identify reclaim opportunities that are being missed.

2. Unclear Tax Deductions and Reclaim Tracking

A common issue for asset managers is not having full transparency into how much tax has been withheld and what is recoverable. When tax data is dispersed across multiple custodians, firms may:

• Be unaware of reclaimable amounts and leave money unclaimed
• Struggle to track outstanding reclaims, leading to lost opportunities
• Miss deadlines for tax reclaims, forfeiting recoverable amounts

Withholding tax recovery is highly time-sensitive, with strict jurisdiction-specific deadlines. Firms that lack a consolidated tax recovery approach may find themselves leaving substantial sums unrecovered simply due to poor data visibility.

3. Manual Processes Increase Operational Burden and Delays

Tracking and reclaiming withholding tax is a highly administrative process. When firms rely on manual data reconciliation from multiple custodians, they face:

• Higher risk of errors in tax reporting and reclaim submissions
• Delays in reclaim filing, which can push claims beyond statutory deadlines
• Increased resource costs, as teams spend excessive time gathering and verifying tax data

Many firms attempt to manage the reclaim process internally, only to find that the combination of fragmented custodian data and country-specific tax requirements makes it difficult to track, file, and follow up on claims effectively.

How Data Consolidation Enhances Withholding Tax Recovery

While many asset managers use general data aggregation tools to consolidate portfolio information from multiple custodians, these systems are not designed to address the complexities of withholding tax recovery. Working with a specialist tax recovery provider ensures that firms not only gain better data oversight but also maximise their reclaim potential.

Instead of manually reconciling fragmented reports and tracking reclaims separately, asset managers can automate tax oversight, reduce delays, and recover more tax by outsourcing this crucial function.

Key Insight: Rather than focusing purely on portfolio aggregation, tax-focused data consolidation through an outsourced recovery process enables asset managers to proactively manage and optimise their withholding tax reclaims.

Through a tax-focused data consolidation approach, firms gain:

1. Full Visibility into Tax Exposures and Reclaim Opportunities

Without a clear, consolidated view of tax deductions across custodians, firms risk missing reclaim opportunities. An optimised, outsourced tax-recovery framework provides asset managers with real-time insights into withheld tax and eligible reclaims, allowing them to:

• Easily identify all reclaimable amounts across different tax jurisdictions and income events
• Know that all deductions have been confirmed to be at the correct rates
• Track the full lifecycle of each reclaim, from filing to recovery

Greater visibility means fewer missed claims and a higher percentage of successfully recovered tax.

2. Faster and More Accurate Tax Reclaim Processing

With a structured, expert-driven and tech-enabled tax recovery process, asset managers can eliminate inefficiencies that slow down reclaims.

• Instead of relying on disjointed custodian reports, firms can take a proactive approach to tax recovery, improving reclaim success rates, faster.

3. Reduced Operational Workload and Increased Efficiency

A tax-focused consolidation process through outsourced withholding tax recovery doesn’t just improve accuracy—it also reduces the administrative burden of managing multiple claims internally.

• By integrating tax recovery expertise with better data visibility, firms can recover more tax while significantly reducing internal resource strain.
• Outsourcing the reclaim process from start to finish can reduce an investor’s administrative burden by up to 94%.

Stronger Focus on Tax Recovery, Less Administrative Complexity

By shifting from manual, fragmented tax tracking to a fully structured, outsourced approach, asset managers gain greater reclaim success, improved efficiency, and full oversight of tax exposures. With expert-led tax recovery services, firms can ensure that every eligible reclaim is recovered without unnecessary delays or resource strain.

The Bottom Line: Why a Tax-Focused Approach to Data Consolidation Matters

For asset managers working with multiple custodians, data fragmentation isn’t just an operational challenge—it directly impacts withholding tax recovery. Without a tax-specific consolidation process, firms risk missed reclaims, inefficient processing, and unnecessary administrative complexity.

By adopting an outsourced, tax-driven data approach to withholding tax recovery, asset managers can:

✅Gain full visibility into withholding tax deductions and reclaim eligibility
✅ Reduce manual reconciliation efforts and reclaim processing time
✅ Maximise tax recovery while minimising operational burdens

Withholding tax represents a significant financial opportunity—but only if firms have the right tools and expert guidance to recover it effectively.

Unlock the Full Potential of Withholding Tax Recovery with WTax

WTax has developed specialist custodian pipelines designed specifically to optimise withholding tax recovery.

Our technology extracts, cleans, and standardises custodian tax data, enabling asset managers to track exposures, monitor reclaims, and recover more tax—faster and with less effort.

Contact WTax to explore how we can help.