Acupay's Charity Support
Many charities are blessed with a financial endowment, which they invest in shares, bonds and other financial instruments. For 21% of charities investment income is even the largest source of income. Thousands of charities own shares or bonds issued by companies like Bayer, Novartis, Carlsberg, Santander and Eni.
Withholding Tax on Charities' Investment Income
In most countries, charities are spared from taxes in general and withholding taxes in particular. They’re rightly freed from the tax burden imposed upon profit making organizations and individuals. Freedom from taxes permits them to focus their finances on causes that support the greater good of the society.
But most governments impose withholding tax on interest and dividends earned by all investors – including the charities since governments do not know the identity of the beneficiary of the investment income. This cuts into the limited resources charities have, and directly affects the amount of help they can provide to others.
Large charities are most likely to have the biggest share of investments, which suffer from unnecessary double taxation. However, small to medium sized charities with lower incomes will also be able to take advantage of our services. We believe that we can significantly help charities across the board: from the very large charities who invest millions, to those who only invest hundreds.
Acupay's Commitment to Charities
Acupay, who acts as tax compliance and reclaim agent on more than 2bn worth of investments, is set up perfectly to support charities reclaim any excessively withheld taxes. And, since we want to do our bit to make the world a better place, we will offer our services free of charge. Any tax reclaims processed by Acupay for charities will be processed at no cost – to the charity or the custodian. And we believe that even the smallest tax reclaims will make a big difference to the smallest charities, therefore we will not set any minimum holdings for charities.
Making a Difference
As examples, Switzerland has a withholding rate at source of 35% which can be reduced to 10%, so there is a significant amount to gain from recovery. Germany also has a high withholding rate at 26.375%, and charities are exempt, so affected charities will be able to claim back all of the withholding. For an indicative table of reduced rates – and hence potential savings for the charities, go to our Charity Treaty Rate Matrix.
Acupay's Experience as Charity Sponsor
We have substantial experience in working in the charity sector, having slowly built up this service since 2009. We have reclaimed taxes on overseas investment income for close to 800 charities. Acupay successfully reclaimed over US$ 8 million for charitably entities worldwide.