1. Withholding Tax Relief
Are investors being properly supported?
Can CSDs enhance their level of service to investors?
Does this represent a new service/revenue opportunity?

2. Global Tax Withholding & Reclamation
The Basics
According to the Organization for Economic Cooperation and Development (OECD), the amount of cross-border portfolio investment exceeds 35 trillion USD.
To encourage growth and cross-border investment, more than 3000 tax treaties around the world based on the OECD Model, reduce source taxation on a reciprocal basis.
In practice however, claiming withholding tax relief under treaties and domestic law is often cumbersome, and time and resource intensive for the bulk of foreign portfolio investors and thus often does not happen.
Estimates vary, but it is believed that about 25% of reclaimable withholding taxes on cross-border securities investment is left unclaimed per year.
Recent estimates put this at about $20 billion USD per annum.

3. Global Tax Withholding & Reclamation
The Basics
Many countries impose a withholding tax on payments of dividends and interest on publicly traded securities paid to investors from other countries.
The tax is generally withheld by the “payer” of the income which is often either the custodian of the securities or the paying agent of the security’s issuer.
The rates of withholding tax vary depending upon the country of investment and the type of income and generally range from 25% to 35%.
These high rates of tax can often be reduced under the terms of bi-lateral income tax treaties between countries, generally to 15% or even 0% in some cases.
However, the tax relief afforded under a tax treaty can only be secured by investors by lodging the required documentation via their financial intermediaries to receive their proper entitlement at the time income is received or by filing a tax reclamation afterward.

4. Global Tax Withholding & Reclamation
Withholding Tax Rates
Withholding taxes on dividends and interest have existed for many years and are generally fixed amounts established under local statute and/or regulations.
Statutory rates can vary substantially. For example on dividends:
Country
Statutory Rate
Austria 25
Germany
26.375
Australia 30
Italy 26
Belgium
Netherlands 15
Canada
Spain
19.5
Denmark 27
Sweden
Finland
Switzerland 35
France
U.S.

5. Global Tax Withholding & Reclamation
Bi-lateral income tax treaties
Tax treaties are formal agreements, usually between two countries, that coordinate the taxation of income that flows between them.
The main purpose of tax treaties is to prevent international double taxation.
To achieve these objectives, treaties contain a variety of provisions including ones that provide reductions in withholding tax rates applicable to qualified residents and sometimes exemptions from tax for certain pension funds, charitable organizations and government bodies.
Whether tax relief is secured via “relief at source” or “tax reclamation” depends on the country of investment, how securities are held and whether the beneficial owner is properly documented
Relief at source is the most desirable method of tax relief for investors
Tax reclamation is the least desirable method of tax relief for investors

6. Global Tax Withholding & Reclamation
Bi-lateral income tax treaties
According to the International Bureau of Fiscal Documentation, there are approximately 155 income tax treaties currently in force between ACSDA member countries and other countries in the world, excluding Canada and the U.S.
Argentina 16
Jamaica 13
Barbados 25
Mexico 54
Bermuda
Nicaragua
Bolivia 9
Panama 15
Brazil 31
Paraguay 2
Canada 91
Peru 10
Chile
South Africa 74
Colombia 11
Trinidad & Tobago
Dominican Republic 1
USA 66
Ecuador 17
Uraguay
El Salvador
Venezuela
Guatemala

7. Global Tax Withholding & Reclamation
Indicative Tax Rates
Some “statutory rates” actually reflect additional “surtax” amounts like Germany.  Effective January 1, 2009, the statutory withholding tax rate is a "flat" withholding tax rate of 25% plus a  5.5% solidarity surcharge, resulting in an effective statutory rate of %
“Standard treaty rates” as I call them here are the rates established under bi-lateral income tax treaties that apply to tax paying residents of these countries
“Recovery rates” refers to the portion of tax withheld that can be recovered by cross-border investors
“Treaty rate for Exempt Entities” refers to the rate of withholding tax that should apply to certain “tax exempt” entities. Some treaties do not provide an exempt rate for “tax exempt” entities. Typical exempt entities can include pension plans, charities, governments and/or central banks
“Recovery rates for exempt entities” refers to the portion of tax withheld that can be recovered by cross- border “tax exempt” investors

8. Global Tax Withholding & Reclamation
Foreign securities held at CSDs
CSD
Individual beneficial owner accounts
Foreign securities held via local CSDs or ICSDs or via global custodians
Depository for local and foreign securities
Safekeeping, Dividend/interest processing, settlement/clearing and other numerous other services
Participant omnibus accounts

9. Global Tax Withholding & Reclamation
The Tax Reclamation process – CSD excluded
Tax reclaim forms completed by beneficial owners or their custodian
Foreign Tax Authorities

10. Global Tax Withholding & Reclamation
Tax Relief services from foreign ICSDs and custodians
Tax Relief “at Source”
Generally requires multiple accounts segregated by tax rate pools
Beneficial owner disclosure and documentation required
Full tax relief on income payable date
Tax “Reclamation” Services
Omnibus accounts possible
Tax relief not received until months later

12. SIX SIS Ltd combines access to relevant fiscal
information and tools specific to global investing needs. The highly professional tax competence center provides you with a tailored service in order to benefit from efficient tax relief.
Our Tax Competence Center at SIX SIS Ltd can assist you in handling your fiscal duties so as to ensure your clients the most efficient and
compliant solutions.
Goal Group presentation

13. - Tax Guide (>60 Markets) - Tax News Flash - Tax Reclaim Service
Service Overview
Standard Services:
- Tax Guide (>60 Markets)
- Tax News Flash
- Tax Reclaim Service
- Global Tax Voucher
- Attestation / Certification
- Segregated & Omnibus Accounts
- Summary & Detail Reporting (clients & B/O)
- Stamp Duty (CH, UK, IRL)
- QI Service
Added Value Services:
- Quick Refund
- Relief at Source
- CGT & WHT Services
- White Label Solution
- WebAccess (online activities & forms via TaxPortal)
- Tax Competence Center
- Sustainable follow-up
- Upload B/O list
- FTT Service
- Fully FATCA compliant
Goal Group presentation

14. Global Tax Withholding & Reclamation
Tax Relief services from foreign ICSDs and custodians

15. Global Tax Withholding & Reclamation
CSD enabled tax relief process at DTC
Foreign
Issuer
BO Clients
DTC
CA Web
DTC
Participant
Net Dividend
CA Web Instruction
Request/Response
Aggregate CA Web
Instructions
Withheld Tax
ADR Issuer/
Paying Agent
Net dividend
Net dividend with
tax relief at source
CA Web Instruction
Request/Response
Foreign
Tax Authority
DTC
Participant

16. Global Tax Withholding & Reclamation
How do DTC CA Web Programs Work?
DTC’s Corporate Action Web (CA Web) programs enable DTC Participants to secure tax relief on foreign-sourced income payments received on many securities held at DTC
Securities covered include American Depositary Receipts (ADRs), Global Shares, U.S. listed foreign shares, Global and Yankee Bonds
There are CA Web programs currently in place for securities from approximately 20 countries
CA Web programs are established based on either proprietary agreements between DTC and foreign tax authorities or based on cooperation between DTC and ADR depositaries, paying agents and/or issuers, and with CDS (the Canadian Depository for Securities)
CA Web programs were designed to allow participants to obtain tax relief at source or expedited tax reclaims originally with minimal amounts of beneficial owner disclosure and documentation submission

17. Global Tax Withholding & Reclamation
CA Web Benefits, Obligations, Limitations
The main benefits of CA Web are:
Pooled claims for unlimited number of beneficial owners
Relief at source most of the time
The important obligations of DTC Participants that use CA Web:
Need to make factual determinations as to the tax status of their customers,
Need to maintain sufficient account documentation,
Need to agree to respond to foreign tax authority audits, and
Must agree to return any tax relief secured for customers for whom they are not able to sufficiently respond to tax audits.
The main limitations of CA Web are that it:
Does not cover all security and investor types
Associated risks for DTC Participants need to be carefully managed
The main benefits of CA Web are that:
tax relief can be secured by financial intermediaries on behalf of beneficial owners based on pooled claims,
pooled claims enable even the smallest investor to obtain tax relief,
up-front beneficial owner documentation is rarely required, and
it delivers relief at source most of the time.
The important obligations of DTC participants that use CA Web are that:
they make factual determinations as to the tax status of their customers,
they maintain sufficient account documentation to support their pooled tax relief claims,
they agree to respond to foreign tax authority audits when they occur, and
they agree to return any tax relief secured for customers for whom they are not able to sufficiently respond to tax audits.
The main limitations of CA Web are that it:
Does not cover all security and investor types
Associated risks for DTC Participants are becoming unmanageable

18. Global Tax Withholding & Reclamation
CSD Service Enhancement and Revenue Opportunities
DTC’s Experience
DTC has offered foreign tax relief services for over 20 years
The value of withholding tax relief facilitated by DTC’s CA Web platform and secured by DTC participants is in excess of $2.5 Billion per year
DTC derives millions in operating revenues
Opportunities for CSDs
To offer enhanced services to their participants
To offer relief at source where it is possible through service agreements with foreign ICSDs or custodians
To offer tax reclaim services through ICSDs, custodians or with the assistance of expert tax reclaim service providers
Generate revenues through service fees

19. Goal Group is the global leader in withholding tax reclamation and securities class actions recovery services. Established in 1989, we help the world’s largest financial institutions maximise investor returns, including five of top ten global custodians and
six of top ten global fund managers. Our market-leading proprietary software and
systems provide the highest levels of data security and process automation, offering
investors an efficient and cost-effective way to reclaim tax on cross-border dividend income and participate in securities class actions. Innovation in technology, combined with the unparalleled industry knowledge and expertise of our global teams, allows us to achieve outstanding results for our clients worldwide. Goal Group is headquartered in London with an expanding footprint across the US and Asia Pacific, where each office is staffed by local tax, legal and securities experts.

20. Noah R. Wortman – Chief Operating Officer, Americas
New York Office
Tel: +1 (212)
Mob: +1 (302)
William J. Salva - Global Business Development Manager
New York Office
Tel: +1 (212)
Mob: +1 (732)
1st Floor
69 Park Lane
Croydon, CR9 1BG
United Kingdom
Tel:
London Headquarters
555 California Street
Suite 4925
San Francisco, CA 94104
United States of America
Tel: +1 (415)
San Francisco Office
17 State Street
Suite 4000
New York, NY 10004
United States of America
Tel: +1 (212)
New York Office
1735 Market Street
Suite 3750
Philadelphia, PA 19103
United States of America
Tel: +1 (267)
Philadelphia Office
Suite 901, Level 9
The Hong Kong Club Building
3A Charter Road, Central
Hong Kong
Tel:
Hong Kong Office
Level 27
101 Collins Street
Melbourne, VIC 3000
Australia
Tel:
Melbourne Office 20