Editorial & Advertiser Disclosure Global Banking And Finance Review is an independent publisher which offers News, information, Analysis, Opinion, Press Releases, Reviews, Research reports covering various economies, industries, products, services and companies. The content available on globalbankingandfinance.com is sourced by a mixture of different methods which is not limited to content produced and supplied by various staff writers, journalists, freelancers, individuals, organizations, companies, PR agencies Sponsored Posts etc. The information available on this website is purely for educational and informational purposes only. We cannot guarantee the accuracy or applicability of any of the information provided at globalbankingandfinance.com with respect to your individual or personal circumstances. Please seek professional advice from a qualified professional before making any financial decisions. Globalbankingandfinance.com also links to various third party websites and we cannot guarantee the accuracy or applicability of the information provided by third party websites. Links from various articles on our site to third party websites are a mixture of non-sponsored links and sponsored links. Only a very small fraction of the links which point to external websites are affiliate links. Some of the links which you may click on our website may link to various products and services from our partners who may compensate us if you buy a service or product or fill a form or install an app. This will not incur additional cost to you. A very few articles on our website are sponsored posts or paid advertorials. These are marked as sponsored posts at the bottom of each post. For avoidance of any doubts and to make it easier for you to differentiate sponsored or non-sponsored articles or links, you may consider all articles on our site or all links to external websites as sponsored . Please note that some of the services or products which we talk about carry a high level of risk and may not be suitable for everyone. These may be complex services or products and we request the readers to consider this purely from an educational standpoint. The information provided on this website is general in nature. Global Banking & Finance Review expressly disclaims any liability without any limitation which may arise directly or indirectly from the use of such information.

Cross-border shareholders still forfeiting $18 billion globally in unclaimed withholding tax  

US investors’ leave over$3.5 billion on the table

The latest research from Goal Group, a leading global provider of withholding tax reclamation services, shows that $18bn of investors’ rightful returns from foreign shares and bonds were lost in the latest financial year because withholding tax on dividends and income is not being fully reclaimed.

US investors suffered the biggest losses out of all markets globally, missing out on $ 3.5bn in recoverable returns, a marginal decline since 2015 of around 2%. However, this marginal decline should be viewed against the fact that the value of US shareholders’ holdings in foreign equities, for instance, has risen in value by over 50% across the same period[i].

Goal estimates that average tax reclamation rates have improved by 9% since the company’s last report on the global tax reclamation landscape in 2013. Currently just under 21% of excess tax remains unclaimed each year.

Victoria Dean, Director of Sales & Relationship Management EMEA & Global Director of Withholding Tax Sales at Goal Group, said: “Just over one fifth of recoverable withholding tax still languishes in foreign tax systems each year, which amounted to a loss of $3.5bn million to US cross-border investors in 2017. Funds that reclaim tax typically boost returns by at least 25 basis points annually, yet there is still the belief that the complex reclamation process isn’t worth the trouble. With the right technology and services, this is simply not true.

“It is therefore an inexcusable loss of rightful returns on which shareholders are often unwittingly losing out. Custodians and fund managers have a fiduciary duty to maximise returns for shareholders, and withholding tax reclamation is a vital element of this.  The gains become even more significant in view of rising proportions of portfolios devoted to cross-border investments and continued rises in global dividend pay-outs[ii].”

Goal has recovered hundreds of millions of dollars in withholding tax for its global client base, which includes five of the top ten global custodians and six of the top ten global fund managers.

[i] Source: IMF

[ii] Source: e.g. Morningstar, Investors Set For $1.25 Trillion Dividend Windfall, 20 Nov 2017

unreclaimed-2018