Amidst the complexities of international taxation, WTax delivers a pivotal solution for institutional investors grappling with the recent changes in German tax filing procedures. In 2023, the German Tax Authority (BZSt) unveiled a new online portal (Elster) for withholding tax reclaim applications replacing the previous process of submitting hard copy paper-based applications. Despite its advancements, the portal currently does not support bulk submissions which has forced many providers to place German reclaim filings on hold for the time being, prompting the need for a robust, agile solution that caters to the demands of investors seeking to recover withholding taxes in Germany, safeguarding millions in reclaims.
Key Challenges in German Tax Reclaims
Withholding tax reclaim processing times in Germany have significantly lengthened in recent years, due to factors such as the cum-ex scandals, and the introduction of Germany’s new portal has further complicated these processes. For pension plans, the challenge is particularly pressing; they must pursue retrospective reclaims since, unlike mutual funds, they cannot take advantage of the coveted status certificates offering relief at source in Germany.
The portal’s current lack of bulk-filing capability requires each income event to be painstakingly filed separately, and with paper-based submissions phased out as of 30 September 2023, a significant portion of the industry has paused German reclaim efforts until a bulk submission option is introduced, potentially provoking extensive delays in the processing timeline. Moreover, further changes in German regulations are anticipated for 2025, intensifying the prevailing uncertainty amongst industry participants.
WTax’s Innovative Response to German Tax Reclaim Challenges
Considering the urgent requirements and potential impacts, WTax has effectively employed its technological capabilities to address this problem. Building on a successful integration with Dutch and Danish Tax Authority portals, WTax has extended its innovative approach to the German Elster Portal. By utilising Robotic Process Automation, WTax ensures uninterrupted, efficient German tax reclaim submissions, eliminating the need for manual processing and human error.
This technology is not only robust but also flexible, ready to evolve with any subsequent process changes by the German Tax Authorities. Collaboration between WTax’s technology and tax-technical experts ensures that the integrity of the tax reclaim process is preserved throughout its automation.
By adopting WTax’s solution, investors will face minimal disruption in their German reclaim filings. This approach effectively avoids delays in the tax authority’s refund processing and prevents claims from expiring, thus ensuring maximum refunds and optimised investment performance.
For more information how WTax can support you with the changes in Germany get in touch with an expert in your region.