Folk wisdom often dictates the earlier the better. When it comes to submitting withholding tax reclaims before Statute of Limitations (SOL) deadlines, the phrase definitely holds true. Varying by market, Statutes of Limitations dictate the timeframe in which investors can submit reclaim applications before entitlements expire. For instance, France allows two years, Switzerland affords three years, Ireland offers four, and Japan provides a generous five. In some countries, the right to reclaim expires on the anniversary of the dividend pay date, though most markets maintain a year-end deadline.
And although that December 31 cutoff might feel far away, it is fast approaching. Client action may be required now, as it can take months to gather all of the documents needed to support reclaim applications.
Why Should I Care?
As a GlobeTax client, you might believe that “I signed a Power of Attorney upfront, GlobeTax will take care of the rest!” While this is true in many instances, markets are increasingly imposing new requirements, such as information to ensure treaty benefits are paid to entitled entities, to combat fraud. To substantiate that investors are legitimately entitled to tax benefits, tax authorities are seeking additional evidence like original signatures and credit advices before granting treaty benefits.
Gathering this evidence takes time; it requires coordination between GlobeTax representatives, clients, and brokers and custodians. As a result, we begin working on expiring claims months (and years!) in advance to ensure everything is submitted by the deadline.
So What Should I Do Now?
Through MIDAS® Connect, our web-based, real-time reporting dashboard, clients can log-in and view paid claims, claims awaiting payment, and claims awaiting filing. We recently added functionality to the dashboard, which allows clients the ability to easily find information on expiring reclaims and identify what still may be needed and from whom. In early 2023, we are expanding our Document Management functionality, so MIDAS® Connect will soon include granular information about missing documents and the value associated with each.
At present, we walk through all of this information with many clients on review calls to keep clients abreast of any action required.
Considering that year-end is rapidly approaching, we ask clients to remain alert to any communications from GlobeTax relationship managers or operational personnel, as signatures or information may be required to ensure claims can be submitted by year-end.
What If I’m Not Yet a Client?
For those who are not yet a client, we encourage anyone with sizable international holdings to reach out. As a general rule of thumb, investors with portfolios in excess of $10 million in AUM are likely to glean the most benefit from tax recovery. To get started, click the “get a free analysis” button on our website.
And don’t hesitate. For as they say, the early client gets the entitlement!