About Foreign Withholding Tax Relief and Reclaims

About Withholding Tax Matrixes

Investors who pay foreign tax may be entitled to favorable withholding rates because of double taxation treaties between the country of domicile of the investment ("issue country") and the country in which the investor files tax returns ("tax domicile"). Such investors may:

Example: A US investor buys a French bond subject to 20% foreign tax. When a $1,000 coupon is paid, a withholding tax relief rate is applied so that the investor receives $920, with $80 withheld as tax. This represents a withholding rate of 8%, as opposed to 20%.

For details about applying withholding tax relief, see Withholding Tax Relief Processing below.

Example: A US investor buys a French bond subject to 20% foreign tax. When $1,000 coupon is paid, the investor receives $800, with $200 withheld as foreign tax. The US investor later books a reclaim receipt, and receives $120 back as a reclaim amount.

For details about booking reclaim amounts, see Withholding Tax Reclaim Processing below.

Withholding Tax Relief Processing

Follow these steps to have Geneva apply withholding tax relief at the time income is received ("relief at source").

  1. Define relief rates for issue countries in the Country/Tax Matrix.
  2. In interest and dividend transactions subject to withholding tax relief, select the Lookup Relief Rate check box to have Geneva automatically apply the relief rate defined for the investment's issue country in the Country/Tax matrix. Or, clear the Lookup Relief Rate check box and enter a Relief % to apply to the transaction instead.

Withholding Tax Reclaim Processing

You can track reclaims in income transactions themselves, or you can enter separate Reclaim Receipt transactions.

To track reclaims in income transactions, follow this workflow.

  1. Define reclaim rates for issue countries in the Country/Tax Matrix.
  2. In interest and dividend transactions subject to a withholding tax reclaim:

For details about entering separate Reclaim Receipt transactions, see Reclaim Receipt Transaction.