1. About VAT IT
VAT IT is the global leader in Indirect Tax recovery services. We
service over 15 000 clients through 26 wholly owned offices
worldwide. VAT IT currently recovers a multitude of different
indirect taxes such as VAT, GST, JCT, Minerals and Oil Tax, Import
VAT and U.S. Mobile Roaming Tax.
The Dividend Withholding Division successfully recovers millions
of Euro’s each year for Asset Managers and Individuals holding
foreign investments in their portfolio.
Dividend Withholding Tax Summary
A holder of foreign equity instruments is subject to withholding
taxes of up to 35% on the dividend income arising from the
holdings. The dividend withholding tax amount is fully / partially
recoverable through complex double taxation treaties and legal
procedures.
The Complexities
Recovering dividend withholding tax is a complex process
because of:
• The involvement of various intermediaries from administrators,
custodians, brokers to investment managers
• The diverse range of double tax treaties
• Ongoing changes in compliance and tax laws
• Dissimilar documentation requirements for different tax
authorities
• Language barriers in dealing with foreign tax authorities
• The determination of the beneficial owner in the context of
varying legal structures
The VAT IT Service
The VAT IT Withholding Tax Recovery Service for clients is
comprised of a two faceted approach:
• Providing detailed analysis of foreign dividend withholding tax
exposure, assessing what percentage of withholding taxes are
currently being refunded and what remains unrefunded; and
• Making applications to recover the remaining unclaimed taxes
from all claimable jurisdictions through the relevant reclaim
mechanism.
DIVIDEND WITHHOLDING
TAX RECOVERY
VAT IT Expertise
Research and Development
• Our R & D department is constantly increasing
the Jurisdictions of recovery and identifying
new claimable territories
• We constantly work with the foreign tax
offices to resolve obstacles in the claiming
process and treaty understanding
Analysis and Reporting
• Comprehensive qualitative and quantitative
analysis of exposure across all eligible
Jurisdictions
• Dividend Withholding Tax exposure report
identifying all claim opportunities
• Online real-time reporting on all submissions
and refunds using state of the art click through
technology
Claim Administration
• Simplifying complex refund processes
• Interfacing between the client and the tax office
• Managing refund processes on scale
VAT IT only charge a success based fee.
No refund, no fee.
Send us your
dividend distribution
report and receive a free
dividend withholding tax
exposure report

2. Customer information:
A large investment manager with global operations and AUM
of approximately £37 billion. Their foreign listed equities
represent 14% of their portfolio.
Situation:
The fund manager was making large investments for several
consecutive years in foreign equities listed locally and on
foreign exchanges. The recovery services for locally listed
foreign equities did not fall within the scope of the global
sub-custodian or the local custodian. The client therefore
achieved limited recovery success.
Recovery services for the foreign listed equities were being
‘managed’ by the global sub-custodian. Custodians are
unable to advise their clients about tax services, in almost all
cases the custodian could not recover a significant portion of
the withholding tax.
VAT IT’s Approach:
VAT IT performed a detailed analysis of the customer’s
recovery process and managed to identify key yield gaps.
VAT IT then put a robust recovery plan by Jurisdiction into
place.
VAT IT also identified claims nearing expiration and was able
to successfully recover £154, 000 in their final year pending
expiration (24% of total recovery).
Withholding Tax Yield Analysis
Before
VAT IT %
After
VAT IT %
VAT IT Submissions
Locally listed foreign equities
Switzerland 24% 100% £323, 165
United Kingdom 0% 100% 194,623
Foreign listed foreign equities
Switzerland 0% 98% £326,1654
Germany 0% 97% 33,457
France 0% 95% 109,958
United Kingdom 0% 100% 14,080
Russia 0% 100% 10,500
Belgium 0% 99% 20,474
USA 100% 100% -
Yields and Total Savings 11% 99% £732,421
DIVIDENDWITHHOLDING
TAX CASE STUDY