Currently the market uses static tax rates, usually from the perspective of one location (e.g. Luxembourg), which for the holder of the stock can be significantly inaccurate, as the applicable tax rate will vary, dependant on the tax rate the shareholder has to pay, due to his country of residence. Tax rates currently provided by vendors and index providers can vary considerably. Datavenue's product will also allow the calculation of True Returns, which will depend on the location and the holding of the stock-holder and the country of the paying company, based on a series of double tax treaties, and the corresponding withholding rates.
This is the first time that such data will be made available to the industry in this readily available form, and is expected to transform the methodology of Total Return indices and the funds that track them. The difference in performance for some funds, using the true tax rates, may be significant. The DTD product should also assist firms seeking or maintaining AIMR-PPS® or GIPS® compliance.
Datavenue's product contains tax rates for over 90 global locations, from a paying and receiving perspective as well as all variations in the rates based on other factors, such as level of holdings.
The leading index providers as well as a number of major international fund managers, and global information vendors are currently evaluating the product.
