Sample Tax Relief & Recovery Transactions
Post-payable tax relief service for a tax-exempt entity (e.g. pension fund)
Company A pays a dividend of $1.50 per ADR
Country Z Statutory Tax Rate = 35%
The U.S. treaty with Country Z for a tax-exempt entity (e.g. pension fund) allows the entity to recover the entire amount withheld (35%).
Pension Fund holds 10,000 ADRs @ $1.50 | $15,000.00 Gross dividend | |
Minus Country Z’s 35% tax withholding (statutory rate) | − | $ (5,250.00) |
Net dividend | $ 9,750.00 | |
Gross Reclaim amount (35%) GlobeTax fee (20% of $5250.00) | + | $ 5,250.00 $(1050.00) |
Final net dividend
| $13,950.00 $4,200.00 |