More Than $186 Billion in Cross-border Investment Taxes Are Recoverable

GlobeTax, the world's largest filer of withholding tax reclaims, has released the results of an aggregation survey showing $186 billion or more of withholding tax on cross-border investments income that is recoverable in 2006/07.

Director of Marketing Ross McGill states, "Previous surveys probably gave a restricted view of the market, in our opinion, because they were derived from limited data sets. And so, while the results were interesting, they were of questionable value. Therefore, we decided that instead of a bottom up analysis, the top down method would be more relevant and useful. After all, at the end of the day, research is useless unless it can be used to inform a course of action or strategy."

The methodology of the 2006 study was conducted through GlobeTax's New York and London offices and focused on independent market sources to establish the size of the withholding tax issue. They used the cross border assets under management at the top global custodians as the start point of the study, according to eMediaWire.com.

GlobeTax provides tax recovery services for Global custodians, Investment banking houses, brokerage and pension funds, among others and considers the complex mix of treaties which exist between governments.

"The research also takes into account "minimizing factors" such as the large proportion of dividend income that is subject to relief at source or RAS and so, while still taxed, the amount the investor receives is correct and there is no over-taxation," according to VP of Marketing Ken Lipton. "Balancing this to some extent were "maximizing factors" such as Statutes of Limitations, where investors may have several years in which to claim their entitlement, during which time these entitlements continue to build"

"Education and recovery strategies are beginning to work and withholding tax is starting to rise up the agenda of fund managers," adds McGill. "Collaborative industry and regulatory efforts to minimize impact, such as G30 and Giovannini, are also to be applauded, as are initiatives to make the reclaim process itself more efficient, such as the recently launched tax reclaim service bureau on the SWIFT network. But despite these, the analysis still translates into high probabilities that many funds may have significant entitlements that will be lost in this financial year and in the future."

GlobeTax President and CEO Martin S. Foont, who commissioned the analysis study, said the results showed, "The message in the numbers is very clear. In order to maximize fund performances and minimize corporate governance concerns, all funds should have a clear and published withholding tax policy and active, benchmarked and documented implementation of it."

You may like these other stories...

The IRS could do a better job if it had more resources at its disposal. That is the essence of a new report released on April 21 by the Government Accountability Office (GAO).The GAO conducted the report to (1) analyze IRS...
In need of CPE credits? Well, if you are an enrolled agent or CPA, you could earn as much as 18 credits by attending one of five IRS Nationwide Tax Forums this summer.The IRS Nationwide Tax Forums are three-day events that...
Russia races to dodge sanctions by adapting law to FATCARussia is in a race against the clock to adapt its laws to the Foreign Account Tax Compliance Act (FATCA) and save its banks from financial sanctions, Peter Hobson of...

Upcoming CPE Webinars

Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.
May 1
This material focuses on the principles of accounting for non-profit organizations’ expenses. It will include discussions of functional expense categories, accounting for functional expenses and allocations of joint costs.
May 14
Save your relationship in those few situations where your performance falls far from perfect. It’s easy to want to brush service failures under the rug, hope no one notices and assume that somehow everything will be all right. In this workshop, Kristen Rampe, CPA will give you the tools to strengthen your professionalism in the face of the worst-case-scenario. Don’t let experience be your only teacher on these topics!