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SimCorp, WTax announce partnership to recover withheld tax

By Sunniva Kolostyak

November 11, 2020

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Investment management solutions provider SimCorp has partnered with tax recovery specialist WTax to offer buy-side institution a streamlined tool to reclaim withheld tax.

SimCorpBy expanding its partnership ecosystem with WTax, SimCorp will be able to address the buy-side struggle for efficient recovery of foreign withheld tax on their assets by using a shared data source.

SimCorp, a provider of integrated, front-to-back, multi-asset investment management solutions and services to buy-side institutions, noted that reclaiming taxes from different authorities and jurisdictions is becoming an increasingly painstaking operational challenge for asset owners and asset managers.

Moreover, in-house teams and custodial support has become stretched over the past years, creating significant knowledge and resource gaps relating to multi-jurisdictional tax legislation. This, in turn, results in many institutional investors losing out on several basis points worth of entitled taxes, on yields and other investment income.

The data integration between WTax and SimCorp aims to fill this gap with its legal expertise, and clients will only pay for services in the event of successful recovery.

Anders Kirkeby, Head of Open Innovation, SimCorp commented that WTax fits into its focus to transform the delivery of its solutions.

“These are lean times for the buy-side, where every possible asset, including recoverable tax, counts. Given our initial engagement with the industry we expect a strong uptake of this offering among our clients, with the benefit of improved net performance and without having to change investment strategy or require additional budget,” Kirkeby said.

WTax’s recovery process eliminates the manual process of liaising with tax authorities across multiple jurisdictions, made more complex in currently heightened market conditions. At the same time, SimCorp will take full responsibility for the data processing between SimCorp Dimension and WTax, empowering firms to generate tax assets, without the need to create a new IT project or assign additional resources and budget.

Daniel Ginsburg, CEO of WTax added: “‘Through our partnership with SimCorp, we are innovatively changing the withholding tax recovery space. We look forward to providing an efficient and automated answer to the current challenge many asset owners face with their recoveries, through this enhanced data collaboration with SimCorp and its clients.”

The collaboration forms part of SimCorp’s dedicated Open Innovation program, created to deliver SimCorp clients enhanced innovation, by leveraging the power and scale of a broader ecosystem of start-ups, FinTechs, and cloud and data providers.

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