Tax Reclaims on German Securities
While withholding tax relief at source is always preferred, it is not available under German regulations. Dividends paid to non-resident investors of German shares (including American Depositary Shares (“ADSs”)) are subject to 26.375% withholding tax and these shareholders are paid net of the withholding on the ordinary and ADR payment dates.
As an investor, you may be eligible for a reduction in the effective tax treaty rate to 15% or for a full refund of 26.375% depending on the investor type.
Acupay offers a complete tax relief processing service both via DTV (quick refund) and long form reclaim and oversees the entire reclaim process from the compilation of the required supporting documentation to the credit of the refunds recovered from the German tax authorities (the ‘BZSt’).
Reclaims on German dividend payments are accepted up to the end of the 4th calendar year following the payment date. Estimated refund processing period by the BZSt is approximately 12 – 18 months.
Acupay DTV Link Solution – Quick Refund
Long form reclaims are the paper‐based procedure for obtaining refunds for excess withholding tax from the BZSt. However, Acupay has leveraged its technology and servicing capability to provide dozens of investors’ custodian banks with an electronic link to the BZSt via the Acupay System. This gives custodians the opportunity to receive tax relief via quick refund and receive the refunds amounts 3 to 12 months from submission.
Reclaims submitted through DTV are accepted by the Acupay system up until 5 months and 1 week from the ordinary payment date.
Click here to find out more about the benefits of the Acupay DTV Link Solution.