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Reclaimable Foreign Tax Credits: Calculating and Applying for Refunds of Excess Withholding by Foreign Payors

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Tuesday, August 29, 2023

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This webinar will detail the process for obtaining relief for overwithheld foreign taxes. Our international tax planning expert will explain when foreign taxes paid can be reclaimed and walk tax professionals through calculating and applying for a refund of excess taxes paid.

Description

Investors in other countries are often eligible for lower treaty rates on their investments, while the country where the investment is held subjects the investment--usually dividends--to tax at high statutory rates. The confusion surrounding this withholding leaves sizeable refunds on the table. Many investors trust their broker will apply for the refund. Others erroneously believe they can take a foreign tax credit for the overpaid withholding. However, brokerage statements may simply report the reclaimable foreign taxes, and the IRS disallows foreign tax credits for foreign taxes paid that are eligible for refund.

Further complicating the recovery of these taxes is the overall complexity of foreign taxes. These taxes are country-specific and assessed at varying rates with various application processes. As countries grapple to find more revenue and investors step up investments abroad, the number and amounts of these excess payments continue to increase. Some investors choose to engage third-party providers to manage these repayments. International tax advisers must understand the steps needed to seek refunds of excess amounts withheld.

Listen as our international tax expert analyzes the concept of reclaimable foreign tax credits and how taxpayers can obtain these valuable refunds.

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Outline

  1. Reclaiming foreign tax credits: an introduction
  2. Foreign tax credit rules and current legislation
  3. The broker's role in FTCs
  4. Steps to seek refunds of excess taxes withheld
  5. Practical tips and best practices

Benefits

Our panelist will cover these and other critical issues:

  • Foreign tax credit rules and recent legislation
  • Steps to take to seek a refund of excess taxes withheld by a foreign payor
  • What is a reclaimable foreign tax credit?
  • Examples of the process to reclaim foreign tax credits in specific countries
  • How U.S. income tax treaties affect foreign tax credits

Faculty

Subramanian, Ragini
Ragini Subramanian
Senior Manager, International, Private Client Services
Eisner Advisory Group

Ms. Subramanian is a Tax Senior Manager in the Private Client Services Group. With over 10 years of tax experience, she...  |  Read More

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