2Q17 Withholding Rate Changes

What’s changing?

Various countries entered into new double taxation treaties in Q2, resulting in lower dividend withholding rates for residents in corresponding jurisdictions. Knowing these rates is essential for investors looking to boost their equity returns in participating countries.



Why are these changes important?

Eligible investors may be entitled to lower treaty rates established under double taxation treaties. These investors may recover the difference between the lower treaty rate and the higher statutory rate with the help of a tax recovery specialist like GlobeTax. A foreign government’s tax authority applies statutory rates to investment income due to their lack of information about the ultimate beneficial owner of the relevant investments. Failure to file the appropriate recovery applications and documentation before pay date, or the expiration of Statutes of Limitations, can result in the loss of these entitlements.


Looking ahead:

With a few exceptions, governments seeking to grow their programs and boost income are entering into, or updating, double taxation treaties and increasing their statutory withholding rates. These changes can occur at unexpected intervals and without notice, and add to the growing complexity faced by cross-border investors along with stricter documentation requirements, increased audits, and regulatory scrutiny. Investors who want to stay abreast of rate changes can do so by signing up for access to GlobeTax’s eTaxData portal. eTaxData covers over 245 markets and is used by financial institutions and investors for tax planning, research and management of dividend withholdings.