During the course of October, WTax attended two conferences hosted by Hansuke Consulting: Operational Taxes for Investment Firms, and the Financial Services Tax Conference: Taxation in Times of Crisis. Two significant themes emerged from the insightful discussions held, namely, the evolution of the taxation landscape, and trust in the end-to-end taxation system. With gratitude to […]

Overview – How to Make the Most of Your Environmental, Social and Corporate Governance (ESG) Investments Environmental, Social and Corporate Governance (ESG) focused investments have grown by more than 750% since they were first mentioned in the 2006 United Nation’s Principles for Responsible Investment (PRI) report. With the considerable growth in ESG investing, ESG factors […]

On 7 June 2022, Luxembourg and the United Kingdom (UK) signed a new double tax treaty (“DTT”) and a supplementary Protocol that will replace the previous DTT signed in 1967.  The new treaty conforms with the latest international tax standards agreed upon by the OECD and includes positive changes that will be beneficial for Luxembourg’s […]

The Italian Supreme Court (Corte di Cassazione), hereafter the “Court”, issued six judgements (Nos. 21454, 21475, 21479, 21480, 21481 and 21482) on 6 July 2022 relating to United States (US) open-ended investment funds and another judgement (No. 21598) on 7 July 2022 relating to a German open-ended investment fund. The Court established that withholding taxes […]

In the case A SCPI v. Finland (C-342/20), a decision on 7 April 2022 by the Court of Justice of the European Union (CJEU) found that Finnish legislation, which exempted contractual investment funds from paying income tax, while comparable corporate foreign investment funds were subject to income tax, is contrary to EU Law. The Applicant’s […]

The Provincial Tax Court of Pescara issued a judgement on 7 February 2022 (Decision No. 49). The judgement established that a Luxembourg SICAV (Société d’investissement à Capital Variable) in accordance with the Directive 2009/65/EC of the European Parliament (“UCITS Directive”) is eligible for a full refund of Italian withholding taxes levied on dividends. The judgement’s […]

Historic Treatment of Foreign Sourced Income From 2004 until 1 January 2022, Foreign Sourced Income (“FSI”) received in Malaysia by Malaysian taxpayers was exempt from income tax under Paragraph 28, Schedule 6 of the Income Tax Act, 1967, apart from a resident company carrying on the business of banking, insurance or sea or air transport. […]

CJEU Advocate General Issues Opinion on Finnish Tax Exemption Relating to Investment Funds On 6 October 2021, the Advocate General of the Court of Justice of the European Union (CJEU) issued an opinion on case C-342/20 Veronsaajien oikeudenvalvontayksikkö (Exonération des fonds d’investissement contractuels) pertaining to Finland’s tax-exemption regime for contractual investment funds. The Advocate General […]

WHT can be as high as 35% when investing internationally, which results in a material impact on investment performance. In some instances, WHT recovery can increase dividend yields by up to 50 basis points. To compile and submit a successful WHT claim, information and documentation need to be sourced from the underlying investor, financial intermediaries, […]

Cross-border taxation is complicated at the best of times. However, harnessing the refund opportunities embodied in taxation legislation can be even more daunting for any investment firm’s finance team. 

The much-anticipated Danish Supreme Court judgment in respect of the Fidelity Funds Case (Case 59/2019) was finally handed down on 24 June 2021.

As an investor, the importance of optimizing foreign withholding tax (WHT) recoveries cannot be overstated. Reducing tax drag has an appreciable effect on investment performance, even more so if the reclaimed funds are reinvested over an extended period. 

As an investor, the importance of optimizing foreign withholding tax (WHT) recoveries cannot be overstated. Reducing tax drag has an appreciable effect on investment performance, even more so if the reclaimed funds are reinvested over an extended period. 

Withholding tax on investment income is undoubtedly one of these certainties, but the industry is on the cusp of momentous shifts in the way taxes are levied, recovered and tracked.

Recently proposed amendments to Denmark’s tax laws are expected to rectify the discriminatory withholding tax treatment of certain comparable Danish and foreign entities. 

Understanding the Basics of Double Taxation on Investment Income. Put simply, double taxation occurs when two countries tax the same income.

In February 2021, Hong Kong’s Financial Services and The Treasury Bureau (FSTB) issued a proposal for easier migration of foreign funds to Hong Kong, in order to encourage more locally domiciled funds and thereby boost the investment market in Hong Kong.

The world of investment structuring and tax planning is filled with complicated decisions, from fund structuring to asset allocations and investment jurisdictions which aim to maximise returns and minimize tax leakage.

In the world of cross-border tax, it has been challenging for the European Commission to harmonise the different regulations and laws that govern EU-law based withholding tax reclaims.

Pension funds are usually tax-exempt in their home country but this is not always the case when they invest offshore and, in most cases, the onus is on the pension fund to prove its tax-exempt status, when trying to reduce or eliminate foreign withholding taxes on investment income.

The asset management industry was in a state of flux. Even before Covid-19, with an increased emphasis on the reduction of costs and the maximisation of returns.

Due to the administrative burden and low value, high volume nature reclaims, the filing of withholding tax reclaims is often overlooked. Further investigation is needed, to establish whether all reclaim opportunities have indeed been identified and refund applications submitted.

WTax is a wholly outsourced provider of foreign withholding tax recovery. Any parties seeking to maximise their withholding tax refund can look to WTax for an end-to-end technology-driven service.

Introduction to SMAs Separately Managed Accounts (SMAs) are portfolios of individual assets managed by a professional money manager on behalf of an investor. Instead of investing in traditional mutual funds or Exchange Traded Funds (ETFs), where securities are pooled or track an index, SMAs allow investors to own the assets directly. SMAs have traditionally been […]

A recent update published by the French tax authorities (FTA) on the 12th of August 2020 offers revised guidelines as to the requirements non-European Union (EU) collective investment funds must meet, in order to be entitled to withholding tax exemptions on French source dividends, pursuant to Article 119 bis, 2 of the French Tax Code. […]

By guest author Max Reed. Max is a cross-border tax lawyer and the founding partner of Polaris Tax Council Canada. WTax partners with Polaris Tax Council in recovering US withholding tax for investors of Canadian pooled funds. Many Canadian tax-exempt investors invest in US equities through a standard Canadian pooled fund. This means that they […]

Earlier this year, WTax outlined some of the withholding tax implications of Brexit. This article explores the latest developments, on how the UK’s official withdrawal from the EU will affect the withholding taxes levied on UK-domiciled funds, once the transitional period ends at the end of 2020.

There is a great deal to be gained from understanding the inner workings of international withholding tax (WHT) recovery – especially when it comes to dividend income. Institutional investment firms stand to increase their clients’ ROI on foreign investments by up to 0.5% by simply unlocking the various dividend WHT reclaim methodologies. If you want to know more about international withholding tax recovery, this article will provide a good foundation.

While global markets continue to recover from the COVID-19 pandemic and uncertainty still lingers around the immediate future of dividends, investment firms should be looking for sound and innovative ways to boost investment performance. 

In the accounting world, the eternal goal is to ensure that financial records accurately reflect the financial position of a particular entity at a point in time. This generally means accounting for transactions when they occur as opposed to when the cash implications are felt.

Many institutional investment firms are unaware of the benefits of withholding tax services in South Africa and the potential for tax refunds by using these services. South African funds stand to gain welcome cash injections to their bottom lines by making use of double tax treaty agreements and European Court of Justice case law. Particularly in Europe, withholding tax refunds are claimable if certain criteria are met.

Collective Investment Trusts (CITs) or group trusts as they are commonly referred to, are addressed in Internal Revenue Service (IRS) Revenue Ruling 81-100 (as modified by Revenue Ruling 2004-67, Revenue Ruling 2011-1 and Revenue Ruling 2014-24). The IRS provided special dispensation for CITs in the form of exemption from income tax to ensure that these structures can be used to pool assets of various qualified retirement plans, individual retirement accounts and other similar plans without creating unnecessary income tax obligations. The goal is to ensure that pension-related money and the returns earned through investing that money, are not eroded through income taxes.

For many years, the US investment vehicle landscape has had a strong affinity to Cayman domiciled structures. Immense benefits can be achieved for US tax-exempt investors as well as non-US investors in US structures through the use of offshore, Cayman Islands domiciled feeder funds. However, in setting up these structures, withholding tax (and the ability to reclaim taxes incurred on foreign investment income) is often overlooked.

2020 has certainly been a challenging year and very few corporates around the world will be unaffected by the COVID-19 pandemic. It’s no surprise that dividend payouts have decreased drastically and in this uncertain time, it’s difficult to predict how long this downturn will last. Media sources such as Forbes and CNBC commented on the […]

This is because the claims are highly complex and require a deep knowledge of the legislation, past court cases and legal precedent set to be able to achieve refunds. Moreover, in most cases, custodians (who are often an investor’s go-to point for DTT claims) are generally unable to help with ECJ claims. What is the […]

Last month, the Swedish Supreme Administrative Court issued a milestone judgement stating that Swedish tax authorities should not deny withholding tax refunds (that were requested based on EU Law) to a US investment fund, based on the Fund’s legal structure.   This is good news for the international investment community seeking withholding tax refunds from Sweden […]

In several judgements regarding withholding taxes on Italian investment income, it came as a surprise to many when Italian tax courts found that the regime applicable to non-resident recipients may be seen to be discriminatory in certain cases and thus in violation of the principle of the free movement of capital as evidenced by CJEU case-law.

The 31st of January has come and gone and the UK has officially left the European Union. As the sign read outside the European parliament; “It’s not goodbye, it’s au revoir”. But let’s talk about goodbye.  There is still a lot of uncertainty around the implications that Brexit will have on international withholding taxes. For […]

Although pension funds are entitled to reclaim a large majority of their foreign withholding taxes, many are not actually getting the full refunds owed to them. 

We’ll be attending the FONDS professionell Conference 2020!  Book a slot with us, let’s grab a coffee and discuss the complex world of foreign withholding tax reclaim. We’ll be helping businesses explore every reclaim opportunity from Double taxation agreement claims to European Court of Justice claims.  You owe it to your investments to increase your […]

Foreign investors should take advantage of the 2019-passed amendments to Finnish legislation related to the taxation of investment funds. These amendments came into force on January 1st 2020 and are aimed at making Finland a more attractive investment market as well as allowing Finnish investment management firms to explore international investment opportunities without added taxation […]

Introduction This guide to Double taxation Agreements and the withholding tax benefits, is intended to provide essential information of Double Taxation Agreements within the context of dividend withholding tax recovery. Why Foreign Investors Need to Understand International Double Taxation Treaties It has become a necessity for any foreign investor to understand the intricacies of international […]

For many global investment management companies, the completion of the W-8BEN-E form is complicated. Ultimately, the lack of understanding over its completion infringes on many investment firms’ ability to receive US dividend or interest payments at the treaty rate. This is especially true for those investment firms in developing countries. This guide explains the purpose […]

Investors in Ireland must prepare for increased withholding tax rates in 2020 as Ireland increases the withholding tax rate in an effort to create a revenue boost to their exchequer. The dividend withholding tax percentage increased from the previous 20% to 25% and has been effective since 1 January 2020. The Irish Times reported that […]

2020 looks set to be the year where investors secure profitable growth by venturing into new demographic segments and geographies, leaving their comfort zones to perform new activities and harnessing investment technology to unlock agility and value (source). But despite technological uptake and a more explorative approach to investing, most investors are still completely in […]

As a political and economic union of sovereign states, understanding the regulatory framework of the European Union presents a unique challenge for investors. The mechanics of claiming withholding tax in the EU are a case in point. Any investor seeking to reclaim dividend withholding tax needs to take into account the relevant national legislation, as […]

The free movement of capital is woven into the framework of the European Union. Article 63 of the Treaty on the Functioning of the European Union (TFEU) states that “all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited”. What are the limits on the […]

The European Single Market was founded on the principle of guaranteeing the “four freedoms” of open economies: free movement of capital, services, goods and labour between member states. The commitment to a common market with parity between states has clear implications for member-state tax fiscal policy, and for tax policy in particular. Free movement of […]