London and New York (PRWEB) September 10, 2004
Ross McGill, Director of Marketing of GlobeTax today announced that GlobeTax had processed over one million tax reclaims in the last twelve calendar months up 70% on previous years. With over one million reclaims annually, GlobeTax is the worldÂs largest and most successful independent foreign tax recovery agency for custodian banks, brokers, funds and private high net worth individuals.
Funds and investors, who buy foreign securities directly or on behalf of others, are often overtaxed and in many cases their brokers and/or custodians are not able to recover the over-withheld portion effectively. ÂThe striking increase in business comes from two sources,Â says McGill from GlobeTaxÂs London offices, Âthe increasing tendency for institutional investors to hold stocks long as part of their yield strategy and corporate governance pressures on fund managers and issuing companies to demonstrate to investors that they are aware of and mitigating withholding tax effectively.Â
If the residency of the company issuing a dividend is different from the shareholderÂs residency, then typically the tax authority in the foreign country taxes the dividend at a high withholding rate before it is remitted net to the owner. The difference can be as much as 35%. ÂThe opportunity for GlobeTax clientsÂ, explains Martin S. Foont, President and CEO of GlobeTax Âlies in the fact that many countries have double tax agreements which allow for the dividend to be taxed at a lower treaty rate, so we can recover the difference between the withheld rate and the treaty rate that the client is actually entitled to. The icing on the cake is that we can also go back in time and make use of Statutes of Limitations to recover tax from previous years. Additionally, the recent U.S. tax rate reduction on dividends increases the benefit for holders of ADRÂs and foreign ordinaries.Â
ÂEven with over a million reclaims under our belt in just twelve months, this is still only scratching the surfaceÂ says McGill. ÂLarge amounts of over-withheld tax still go unreclaimed each year.Â Industry estimates vary but can be as high as $200 Billion. ÂFunds usually have a spread portfolio often with 25-30% of their assets cross border which means that, with tax recovery services from GlobeTax, they could improve performance by several basis points with no effort and no risk.Â
GlobeTax will be launching a new web site later this month at http://www.globetax.com, where institutional investors, fund managers and custodians will have access to on-line withholding tax assessment tools, corporate governance and proxy voting policies related to withholding tax. The firm already offers the global investment management community free fund and portfolio analysis.
For more information please contact:
Len Lipton VP Marketing
Tel (212) 747 9100
Ross McGill, Director of Marketing
+44 (0)20 7618 6692
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