Global Tax Withholding & Reclamation Process

It is a known fact that "The world is Flat" - more and more companies, entities and individuals are getting into making investments or reaping benefits directly or indirectly abroad. Some way or the other, all of us, whether individuals or big entities get affected by the global happenings. When it comes to taxation issues regarding cross border investments, the structure is muc more complex and not easy to get through. Hence, in this article, We cover a brief outline of Process of Global Tax Withholding and Reclamation so as to get the reader familiar with it. Millions and Billions are withheld or better to say over-withheld in the name of overseas investments. Not just that, the expenditure by various participants in the investment business, to get these tax money back is not only costly, but complex and despite following it, entire money is not refunded.

Hence, in this article, we attempt to explain the main points about How the Global Tax Withholding System works, What best practices and processes should be followed and what should be done by international organizations to get the maximum tax relief

Global Tax Withholding & Reclamation Process

. The course can broadly be outlined in the following 5 categories:

I. International Withholding Taxes: The course starts with a little theory and background of Global Taxation. We then delve into the following topics:

 -- Statutory Withholding Global Tax Rates and Global Tax Rules

 -- Info about the Treaty as well as the Domestic Law Relief

 -- Relief at Source: Can you expect any relief in taxation at the source itself?

 -- Tax Reclamation: Process of how to relaim your global tax


II. Customer Account and Tax Status Issues:

 -- The various partied involved: Starting right from individuals and then moving on to the case of big entities like companies, Funds, Charities/Non-Profits, Governments, Banks or Intermediaries, Joint Investments, etc.

 -- The case of identifying the Beneficial Owner: It can be complex given the various norms followed across the globe

 -- Best Practices for documenting accounting details which will assist in maximum tax savings

III. DTC Elective Dividend Service (EDS) Issues:

 -- An intoroduction to EDS Programs and how do they work?

 -- Benefits of EDS

 -- Obligations of EDS

 -- Limitations of EDS

 -- Role of Depositaries, Globe Tax and Acupay

IV. Local Custodians and Tax Authorities

 -- Why must tax reclaims be filed with custodians in some markets and with tax authorities in others?

V. OECD (Organization for Economic Cooperation and Development) Developments

 -- What is the OECD and who participated on the informal consultative group on the taxation of collective investment vehicles and procedures or tax relief for cross-border investors?

 -- Status of the project to harmonize and standardize withholding tax relief procedures world-wide

 -- CIVs: proposals for when and how CIVs may be able to obtain tax treaty benefits

 -- Implementation Procedures: proposed new documentation and procedures for portfolio investors to claim treaty or domestic tax law benefits in the source country