Tax relief provisions vary from country to country. The information below outlines the jurisdictional tax and market practices of France, Germany, and Switzerland for exemplary purposes with the following typical market structures:
- Financial intermediaries (i.e. global custodians, broker dealers, asset managers, etc.) open accounts through the Sub-custodian networks in all foreign markets of operation.
- Sub-custodian networks open omnibus accounts for the benefit of financial intermediaries in foreign markets with Central Securities Depositories.
These market structures support the multi-tiered intermediated financial processes for settling and clearing trades, disbursing income globally, etc. The actual beneficial owners (global investors) are not known in the intermediated tiers at a high level. Identities of the beneficial owners lay with the respective financial intermediaries. Therefore, paying agents withhold the full statutory tax rates on dividend and interest income on behalf of the foreign government tax authorities.
The below use base models illustrate how these structures might impact beneficial owners in France, Germany, and Switzerland:
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France Use Base ModelThe statutory withholding rate for French sourced dividend income is 30%.
Disclaimer: Vectigal is not a tax advisory company; therefore this literature should not be construed as offering tax advice. All persons should consult with their tax and legal advisors with respect to tax issues. Furthermore, this literature should not be taken as an offer to buy or sell any securities.
Germany Use Base ModelThe statutory withholding rate for German sourced dividend income is 26.375%.
Vectigal's Tax Reclaim Use Base Model
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Switzerland Use Base ModelThe statutory withholding rate for Swiss sourced dividend income is 35%.