Tax Reclaims on German Securities

While withholding tax relief at source is always preferred, it is only available for non-German investment funds under German regulation (effective from 1 January 2018). Dividends paid to all other non-resident investors of German shares (including American Depositary Receipts (ADRs)) 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 and the bilateral tax treaties in place between Germany and the country of tax residence of the investor.

Acupay offers an IT platform as well clerical assistance that allows financial intermediaries to offer a tax relief processing service both via DTV (quick refund) and long form reclaim. Acupay monitors 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 refunded 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.