Digital Refund Of Foreign Withholding Taxes With Divizend

Thomas Rappold, Co-founder and CEO of Divizend (Photo © Silicon Luxembourg)

The European Union has long been calling for barrier-free access to foreign capital markets, including a uniform way to refund withholding taxes on foreign dividends. Technical innovations provide the basis for new solutions.


Editor’s note:

Dear readers and members, we are excited to share with you this short survey of the most promising FinTech of the year, 2021 CATAPULT: Kickstarter winner Divizend, the leading international Wealth tax FinTech platform for the fastest way to reclaim foreign dividend withholding taxes. Divizend primarily focuses on retail investors and with your answers to their small set of questions, they will better assess, analyze and understand your pain points and difficulties in this process. In times of high inflation and negative interest rates, it is their mission to get your money back and provide you with a stable, sustainable, and profitable investing alternative. And they even have a little gift for you! Take part of the survey here.


In times of expansionary monetary policy, zero interest rates and custody fees, securities investments continue to gain importance. The motto for many investors is therefore currently: “Dividend is the new interest”. Dividend stocks also tend to have a solid business model with continuous profits and greater resilience. Investors can find exciting dividend stocks not only in Germany, but also in Europe, Asia and the USA.

In many cases, foreign stock exchanges feature shares in companies that have a very long dividend history. In addition, these also contain industries and business models that are not encountered in an investor’s home market: Switzerland with pharmaceutical companies such as Novartis and Roche, France with luxury goods groups LVMH and Hermès, or Canada with infrastructure stocks Enbridge and Canadian National Railway.

If investors decide to invest in foreign stocks, however, they usually have to swallow a bitter pill: In addition to local capital gains tax, the dividend is also subject to significant withholding tax in the respective home market of the share.

Complicated refund process

For example, an investor who owns Swiss stocks receives a gross dividend of CHF 1,000. At source, 35 percent, i.e. CHF 350, are initially withheld. Due to the existing double taxation agreement between many other countries and Switzerland in the amount of 15 percent, a foreign owner of Swiss dividend shares can claim back 20 percent. Thus 200 EUR and this up to four years retroactively. Considerable sums quickly add up for both private and professional investors. According to estimates, Luxembourg investors currently do not reclaim up to one billion euros per year.

However, until now, shareholders have had to work their way through complex forms and the websites of individual foreign tax administrations. In most cases, the information is also only available in the respective national language and information from the foreign tax authorities is difficult to obtain. In short, withholding tax has been a highly frustrating topic for investors.

Digital withholding tax refund solution

More and more foreign tax offices are allowing withholding tax refund requests to be sent digitally. WealthTax company Divizend offers private clients, tax advisors, family offices, banks and the fund industry the possibility to reclaim foreign withholding tax without barriers.

To do so, the fintech uses a four-step approach: Interested B2C or B2B shareholders create a user account, then import their securities accounts via a custom-developed multibanking securities interface. The customer’s portfolio data is supplemented with further details such as payment dates and dividend amounts. The securities are then grouped by country and displayed in advance, including the amount of refundable withholding tax in each country. Finally, investors are guided through the forms in an intuitive step-by-step process – which are usually pre-filled – until the application is submitted.


Sponsored by Divizend This article was first published in the Silicon Luxembourg magazine. Read the full digital version of the magazine on our website, here. You can also choose to receive a hard copy at the office or at home. Subscribe now.

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