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Endowments and foundations generally benefit from tax-exempt treatment by their country of residence, and they are usually entitled to a significant recovery amount- often 100% of the tax withheld from them on their investment income based on similar treatment afforded them by bilateral tax treaties. However, the complexities of the reclamation process mean that many endowments and foundations never receive the money they are entitled to.
Because of the network of banks, brokers and prime brokers that hold shares for foundations and endowments, it is often unclear to a foreign tax authority who the ultimate beneficial owner of a security is. Therefore, investment income realized by these entities may be subject to a higher than applicable rate of tax withholding. Engaging in tax reclamation enables endowments to maximize their investment returns, and ultimately bolster their funding by retaining more of their investable assets.
GlobeTax has helped to recoup millions of dollars in excess withholdings on behalf of hundreds of endowments and foundations. For more information on how GlobeTax can help your organization maximize investment income, please contact us.
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