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The Solution to Successful WHT Recovery for Individuals

The Solution to Successful WHT Recovery for Individuals

Oct 13, 2021

Many wealth managers, Registered Investment Advisors (RIAs) and family offices often leave the responsibility of withholding tax (WHT) recovery to their clients, under the premise that these claims will be recovered by either their custodian banks or their own advisors. However, filing WHT claims is challenging, and many advisors steer away from this process altogether due to the administrative burden and the inherent complexities.

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, custodians and sub-custodians. In addition to sourcing this information, challenges such as completing onerous claim forms, dealing with language barriers, navigating points of contact at foreign tax offices and collating supporting documentation further complicates the process.

Once claims are successful, there are further hurdles to address, such as dealing with queries from tax offices as well as tracking and accounting for recoveries when repayment dates are uncertain.

These copious hindrances often create a situation where WHT is not pursued and eventually expires. Without a simple solution to recover these taxes, investors will continue to dilute their investment returns unnecessarily.

Withholding Tax Recovery for Individuals Made Easy: WTax’s Tech-Based Solution

To help ease the challenges experienced by international investors, WTax has developed a digital platform to simplify the withholding tax reclaim process.

In developing a digital platform, our team has considered the challenges experienced by the various parties involved in the WHT recovery process from financial intermediaries to the end-investor. In providing a comprehensive solution, the following key functionality has been incorporated in WTax’s digital platform:

  • Enabling financial intermediaries to input investor information digitally via the portal — reducing paperwork, errors and the time required.
  • Integrity checks on information inserted in data fields ensure completeness and enhance accuracy and thereby increasing the success rate of WHT reclaims.
  • WTax’s digital platform pre-populates WHT claim forms using the information provided to the point that they are ready for signature and submission.
  • The digital platform notifies the relevant parties of supporting documentation required and users can simply upload documentation directly to the digital platform.
  • At any stage of the process, authorised users can communicate with their dedicated account management team via the digital platform.
  • Once WHT claims are submitted, users can track the progress of their WHT claims in real-time.

The digital platform is accessible by various parties involved in the WHT reclaim process and is fully customizable to suit the needs of both intermediaries and end-clients.

Start Managing Your WHT Recovery Today

In a world where advisors strive to obtain alpha for their clients, WHT reclaims may be the value-add that is the differentiator between competitors. Contact WTax’s Private Wealth Team today to find out more.