Tax certificates and their costs: how to easily obtain the necessary tax certificates?

Obtaining additional tax certificates, tax vouchers or credit tips can be tedious and requires not only time, but also money.

In this article, we will delve into the steps to follow to obtain these certificates, to show how to obtain them in the fastest, most effective and, especially, economic way. If you have investments in countries such as Germany, Switzerland, Portugal, France or even Canada, we invite you to continue reading this article to discover how to obtain these certificates quickly, effectively and economically efficient.

There are several types of tax certificates that may be necessary for investors and taxpayers. Among the most common are:

1. Retention Certificate: This document shows the withholding taxes made on income, such as salaries, dividends, or interest, during a specific tax period.
2. Tax Declaration Certificate: It provides a summary of the tax returns filed, showing reported income, deductions applied, and taxes paid or refunded.
3. Tax Payment Certificate: Confirm that the corresponding taxes have been paid, which may be necessary for certain legal or financial procedures.
4. Tax Exemption Certificate: It is used to prove that a person or entity is exempt from paying certain taxes, depending on their particular tax situation.
5. Tax Residency Certificate: It proves the tax residence of a person or entity in a specific country, which is important to avoid double taxation.
6. Tax Voucher: This document is primarily used in the United Kingdom and other Commonwealth countries to certify taxes withheld at source on investment income.
7. Credit Advice: Tell me about available tax credits that can be applied against taxes due, such as investment credits or foreign tax credits paid.
8. Dividend Certificate: It details the dividends received from investments, including the withholding taxes applied.

Basically, almost every country that requires an additional form of tax certificate requires a different document. This is because regulations for these certificates are often established at the national level and, therefore, they differ in format and form for each country. As a result, unfortunately, there is no international standardization in this area.

Most of the necessary tax certificates can be easily obtained through your bank. Below, we'll show what document each country requires and how you can obtain it.

Germany:

• Withholding Certificate: Provided by your bank or employer.
• Tax Declaration Certificate: Issued by the German tax authority (Finanzamt).

Switzerland:

• Tax Residence Certificate: Issued by the local tax authority.
• Tax Payment Certificate: Available through your bank or tax authority.

Portugal:

• Tax Exemption Certificate: Obtained from the Portuguese tax authority.
• Dividend Certificate: Issued by your bank or the entity issuing the dividends.

France:

• Withholding Certificate: Provided by your bank or employer.
• Tax Credit (Crédit d'Impôt): Issued by the French tax authority.

Canada:

• Tax Voucher: Available through your bank or financial institution.
• Tax Payment Certificate: Provided by the Canadian Revenue Agency (CRA).

To obtain a refund of German tax withholding, a “German tax certificate” is needed, which is clearly different from a regular dividend receipt. This certificate is generally requested by foreign banks through the German correspondent bank, which is often the main driver of increased costs and, therefore, generates a fee for the end customer.

The easiest way to obtain this certificate is to forward to your bank the “Request for the creation of tax certificates” generated on our website in the Maximizer section of the RECUPERA app for private investors.

It's important: make sure that you don't just upload the signed order or the dividend receipts again, but the requested tax certificates. In addition, it's important to note that not all dividend distributions require an individual tax certificate. To save costs, it is possible to submit a global or annual tax certificate.

Picture: Example of a German tax certificate

In Switzerland, a special form of tax certificate, known as a “Tax Voucher”, is also required. Fortunately, Tax Vouchers are relatively easy to obtain, because they are in high demand. A Tax Voucher usually costs, at most, half as much as a German tax certificate.

Picture: Example of a Swiss Tax Voucher

For the return of the Portuguese withholding tax, an additional tax certificate called “Credit Advice” is needed. In the case of Credit Advice, the most important thing is the data it contains. Unlike Germany or Switzerland, there is no clearly defined structure, so we cannot provide a standard model. However, you can request Credit Advice from your bank in the same way as the previous documents.

In France, the form called “Form 2777” is required. Compared to the certificates mentioned above, this one is much more difficult to obtain, since banks must request it from their respective depositary institution. Unfortunately, not all banks offer this service. If you are interested in refunding the French withholding tax, first check with your bank to see if they can issue Form 2777 and under what conditions.

In Canada, two certificates are required, although they are not strictly fiscal in nature. These are the “Affidavit of Beneficial Ownership” and the “Affidavit of Registered Ownership”. Unlike a withholding tax certificate, these documents prove that you are the real owner of the named securities and, therefore, the legitimate recipient of the dividends. We recommend that you check with your bank for these two documents if you are interested in returning Canadian tax withholding.

Obtaining tax certificates can seem like a tedious and costly process for many investors and taxpayers. However, with appropriate guidance and knowledge of country-specific procedures, it is possible to significantly simplify this crucial aspect of international financial management.

In this article, we've detailed the most common types of tax certificates required in countries such as Germany, Switzerland, Portugal, France, and Canada. Each country has its own specific regulations and formats for these certificates, reflecting the complexity and diversity of the global tax landscape.

To simplify the process, we highlight the importance of using tools such as the “Request for the creation of tax certificates” on our Maximizer platform, designed to speed up the request and minimize errors for private investors. In addition, we stress the feasibility of obtaining global or annual certificates to optimize costs and administrative efforts.

Although the associated costs may vary, it is essential to consult directly with your bank for detailed and up-to-date information on specific fees and procedures for issuing tax certificates.

At Dividend Refund, we are committed to providing clear guidelines and practical resources for institutional investors, helping them navigate the complex world of international tax certificates. Our goal is to provide an efficient and affordable service that allows investors to focus on their investment strategies, minimizing the administrative complications associated with international taxation.

In addition, private investors can use our RECUPERA tool to simplify the fulfillment of each country's administrative obligations in a clear and efficient manner.

For more information on how to maximize your returns and effectively manage your international tax obligations, feel free to contact us at recupera@dividendrefund.com. We're here to help you achieve your financial goals with confidence and clarity.

Source: Divizend