How are taxes recovered?

GlobeTax pursues tax recovery in three ways, depending on market rules, available client documentation, and the contractual agreement between GlobeTax and the financial institution.

• Long form (post-payable) reclaim:In this regime, the foreign tax authority will tax the dividend at the statutory rate on payment date. Investors must then submit documentation to demonstrate they qualify for the lower treaty rate. If approved, the tax authority will remit the excessively-withheld tax, a process that can take many years in some markets.
• Relief at source:In this regime, investors must demonstrate to foreign tax authorities, in advance of payment date, that they qualify for the treaty rate. The tax authority will then withhold tax (at the lower rate) on pay date. This process ensures that investors are taxed at the correct rate up-front, and obviates the need for a lengthy recovery process. GlobeTax’s relief at source service is known as MIDAS™.
• Quick refund:If some investor documentation is on file with the foreign tax authority on pay date, over-withheld taxes can be returned through “quick refund”, in some markets. Although the foreign government will still withhold the statutory tax rate on pay date, a refund is issued within several weeks.