What are the challenges you see in withholding tax claims processing?
The biggest challenges faced in the operational processing of withholding tax reclaims are a combination of regulatory complexity, data management, excessively long processing timelines, risk management, large volumes of documents to process, and various language barriers across reclaim jurisdictions, just to name a few.
Accurate data collection and management, as well as ensuring the integrity of such data, is crucial in ensuring the accuracy of documents obtained to support the entitlement to refunds, while simultaneously mitigating risk for both the fund as well as the service provider filing the reclaim on behalf of the fund.
As an operations manager, my key focus is navigating the steps that WTax can take to combat these challenges through technological investment and integration, economies of scale and effective communication methods with relevant stakeholders, to achieve the most efficient and cost-effective solutions for our clients. Through our technology-driven automated processes, WTax effectively navigates these challenges through data streamlining, advanced document collection platforms, and automated claim preparation technology to ensure optimal tax recovery outcomes for our client base. This is coupled with oversight from an immensely technical submission team who ensure that the highest quality is maintained at all times.
How complex is the withholding tax process and documentation?
The withholding tax process and its associated documentation are inherently complex, especially in a multinational context. Different countries have unique tax laws and regulations that are frequently updated or amended and staying compliant with these diverse and dynamic regulations requires significant effort and expertise.
Documentation required to prove a fund’s entitlement to a claim for a refund is highly dependent on the regulations set out by each country and can differ vastly per jurisdiction, per fund structure, and per country in which the fund is domiciled for tax purposes.
Ensuring the correct documentation per reclaim combination is technically demanding and requires continuous monitoring and adaption of processes to achieve optimal returns.
WTax has been at the forefront of technological advancement of reclaim processes over several years to combat the complexities within the reclaim process through significant technological investment, the integration of Artificial Intelligence (AI) into our processes and the flawless balance between highly skilled tax professionals and technological interaction. This combination results in the ability to process mass volume in the shortest possible timelines while maintaining high-quality claim output.
What is more important in the tax operations world: technology or people?
One is not more important than the other. In the tax operations world, both technology and people are critically important, and their roles are complementary. The ability to leverage advanced technology helps manage complexity by reducing manual intervention error rates and assists greatly with time-spend and volume output by automating repetitive, time-consuming tasks, making processes significantly more efficient and scalable.
WTax’s tax professionals are one of our biggest assets setting us apart from other industry players. Our people bring an expertise which drives complex problem solving, strategic planning, and adaptability of process to ensure that we offer the best possible service to our clients through WTax’s investment in hiring only the smartest minds to advance and iterate our existing technology.
The collaboration between our people and technology has resulted in improved operational efficiency in excess of 60 per cent in the last two years.
WTax’s success from an operational perspective is driven by the constructive collaboration we have created between technology and people. This collaboration has resulted in improved accuracy, efficiency and has allowed professionals to shift their focus to strategic, high-value activities rather than menial tasks, all of which have contributed to exceptional levels of client satisfaction.
How important is outsourcing in today’s investment world?
The withholding tax landscape is rapidly evolving, making outsourcing more important than ever. In our experience, clients often struggle to navigate the extensive administrative burdens and complex requirements related to the reclaim process.
Tax authorities worldwide are also making it more difficult for funds to obtain refunds of withholding tax by escalating the burden of proof for reclaim and relief entitlement to mitigate fraud risks and dividend scandals that have presented themselves in the reclaim industry in the past.
Clients often find it difficult to stay abreast of regulatory changes as well as determining how these changes will affect their returns, resulting in investment firms turning to external providers to assist in navigating these complex regulatory and administrative hurdles.
How easy is it to scale in today’s investment operations world?
Advances in technology have made it easier for scaling in the investment operations world, however, it is not always possible for investment firms to achieve the scalability of outsourced partners due to some of the challenges faced when attempting to scale, such as the cost of building or acquiring advanced technology that can easily cope with the regulatory, operational and data management complexities faced in the withholding tax reclaim space.
WTax has invested significantly in technology and continuous innovation to streamline processes by making use of various AI tools, Robotic Process Automation (RPA) and Application Programming Interface (API) integrations to achieve the scale present in our processing operations teams today. We have also invested greatly in ensuring that we employ the best-in-market, skilled professionals in the operations, technological, and tax technical fields which has elevated our service offering to exceptional standards.
Clients leveraging this scale by partnering with WTax have experienced minimised tax leakage, increased recovery yields and access to real-time reporting with minimal client involvement, which is significantly more beneficial overall than trying to scale their own internal tax recovery teams.
Can you describe WTax’s approach to balancing technology and human expertise in your operational processes?
Technology is at the forefront of WTax’s operational processes, from our proprietary client portal providing a state-of-the-art client experience, to our cutting edge technology which has streamlined our processes and the way we file claims with tax authorities around the world, it’s safe to say that WTax has made technology and its advancement a key focus in the operational space, leaning on the expertise of our highly skilled staff to implement these enhancements.
As previously mentioned, WTax practises a constructive collaboration between technology and people in our operational processes. We have achieved this by strategically mapping each fundamental process, identifying the weaknesses and human error involved therein, and designed technological solutions to mitigate human involvement in repetitive and menial processes.
We have also introduced RPA, API integration and workflow automation, which has empowered our people to take a more strategic approach to their roles and our business by freeing up their capacity to embrace complex decision-making, creativity, and opportunities for innovation.
Although technology drives WTax’s scalability and efficiency as a tax technology company, our people are at the heart of our business and our relationships with clients and tax authorities worldwide. It is this collaboration between technology and people that makes WTax unique and set us apart from other players in the market.
How does WTax ensure compliance with the varying tax regulations across different jurisdictions?
WTax has always taken a multifaceted approach to ensuring compliance at the highest levels by combining technology, expertise, and strategic processes.
Our proactive approach ensures staying abreast with the varying tax regulations through our in-house tax technical team which comprises of experienced attorneys and accountants who monitor any developments in tax regulations or tax relief that could have an impact on investors.
WTax also monitors updates daily through subscriptions to tax platforms such as International Bureau of Fiscal Documentation (IBFD) and Tax Notes and remains engaged with relevant industry bodies through frequent meetings and conferences. WTax has strong relationships with tax authorities worldwide and we leverage these to navigate varying regulations and impending changes in the respective jurisdiction.
In addition, our internal systems have been strategically developed to allow for easy adaptation to changes in regulations across the varying jurisdictions in our system’s sophisticated rules engine to implement the changes in real time, or from the applicable dates of changes, where necessary.
WTax also monitors trends in feedback from tax authorities and conducts regular internal audits on reclaims to ensure compliance procedures are effectively maintained.
What role does automation play in WTax’s withholding tax recovery services, and how has this evolved?
Automation has played a significant role in WTax’s service offering and has allowed us to improve efficiency and accuracy across our processing operations by eliminating human error and expediting submission and refund timelines for our clients.
With automation being a key focus for WTax over the past few years, we have seen drastic evolution of our data collection and management processes through direct data exchange APIs, as well as significant improvement on our document processing timelines using Optical Character Recognition (OCR) and automated verifications.
Our internal systems have also become more sophisticated, allowing for automatic, rule-based processing and subsequent automated claim generation. These improvements have resulted in improved efficiency rates in excess of 60 per cent over the past two years and have allowed WTax to scale operations effectively to manage larger volumes of reclaims, without a proportionate increase in personnel headcount.
WTax has also invested in technology which provides investors with access to live reporting of their reclaims throughout our process and gives transparency into processing timelines and returns, leading to overall client satisfaction.
Overall, automation has enabled WTax to scale operations and provide high quality, and fast-paced tax recovery services. WTax is committed to the continuous advancement of our technology to enhance the effectiveness and efficiency of the withholding tax recovery services we can offer to investors, with the goal being to achieve higher levels of client service excellence.
In your opinion, what are the key factors that investment firms should consider when deciding whether to outsource their withholding tax recovery processes?
Investors should consider how partnering with a specialist reclaim provider, such as WTax, will allow them to maximise returns on their offshore investments effectively, while maintaining elevated levels of risk mitigation and cost efficiency. Investment firms should partner with a provider who offers advanced technology and automation tools, expertise in the field, scalability, and alignment with the investor’s overall objective to enhance their experience with the withholding tax recovery process.
WTax offers a best in its class tax recovery service through operational efficiency by using innovative technologies to ensure that our clients receive the highest level of service excellence, ultimately enhancing refund success rates for our clients which surpass industry standards.
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