Scenario Data

Several scenarios follow. Each scenario uses the data in the following tables.

Scenario 1

Entities Taxdemo1, Taxdemo2, and Taxdemo3 all own a long position of Tax Security1. At the time of the Coupon Due Date, starting from January 1, 1999, the following tax withholding and reclaim rates are applied.

Example A. Entity Taxdemo1

Although there is a direct match for the entity Taxdemo1 and Tax Security1 in the Global Specific Tax table, zero Tax Rates and zero Reclaim Rates are applied for the Taxdemo1 entity. The reason for this is that the entity is set up with a Gross Income Tax Accounting Method. The gross income tax method tells Eagle Accounting not to apply tax withholding and tax reclaim.

Example B. Entity Taxdemo2

Zero Tax Withholding and Tax Reclaim rates are applied to the coupon:

• The first step involved in this decision process is that Eagle Accounting searches the Global Specific Tax table, and finds no match in the table for the combination of entity Taxdemo2 and Primary Asset ID Tax Security1.
• Because Eagle Accounting does not find a match in the Global Specific Tax table, Eagle Accounting then queries the Global Override Tax table for a match.
• In the Global Override Tax table, Eagle Accounting does find a match for the entity/security combination, and effective date of coupon payment (entity Taxdemo2, security Tax Security1, and effective date January 1 1999). Also, Tax Security1 has an Issue Tax Type of Standard, an Issue Country of Australia (AU), and a coupon payment date of January 1,1999.
• Because an applicable match was found in the Global Override Tax table, Eagle Accounting then searches for an applicable match in the Global Tax table, where the Override Tax Indicator is set to Yes.
• An exact match is not found in the Global Tax table. There is one row where the Override Indicator is set to Yes, it is the second to last row of the Global Tax table. However, this row did not meet all of the criteria, only those shown with a check mark below.
  • Override  Override Indicator is set to Yes
  • Distribution Type equals Interest
  • Entity  Entity Country is US
  • Asset Country is AU
  • Entity Tax Type is Trust
  • Entity Qualifier is Level 1 or All
  • Issue  Issue Tax Type is Standard or All
  • Primary  Primary Exchange is Melbourne or All
• Because there is not an applicable match in the Global Tax table, where the Override Indicator is set to Yes, Eagle Accounting applies a zero Tax Withholding Reclaim Rate.

Example C. Entity Taxdemo3

20% Withholding and 5% Reclaim are applied to the coupon. This occurs because:

• First, there is no match in the Global Specific Tax table.
• There is no match in the Global Override Tax table.
• Eagle Accounting then searches the Global Tax table for the best possible match.
• Eagle Accounting finds a direct match (first row in Global Tax table above) for the:
  • Entity Tax Type (Trust)
  • Entity Tax Qualifier (Level 1)
  • Entity Country (US)
  • Issue Tax Type (Standard)
  • Asset Country (AU)
  • Primary Exchange (Melbourne)

Scenario 2

Entity Taxdemo4 Example

Taxdemo4 owns a long position of Tax Security2. During the accrual process starting from January 1, 1999, the following tax withholding and reclaim rates are applied:

19.4% Tax Withholding and 0% Reclaim are applied at the time of accrual processing.

• The first step involved in this decision process is to confirm that there is no match in the Specific Global Tax table, nor is there a match in the Global Override Tax table.
• Eagle Accounting then searches the Global Tax table for the best possible match. The best possible match follows:
  • Entity Tax Type (Mutual Fund)
  • Entity Tax Qualifier (Level 4)
  • Entity Country (U.S.)
  • Issue Tax Type (All) (See note that follows.)
  • Issue Country (AU)
  • Primary Exchange (All) (See note)

Scenario 3

Entity Taxdemo5 Example

Entity Taxdemo5 owns a long position of Tax Security2.

During the accrual process starting from January 1, 1999, 10% Tax Withholding and 5% Reclaim Rate are applied to Tax Security2 for the entity Taxdemo5.

This occurs because Eagle Accounting finds a direct match for this security and entity combination in the Global Specific Tax table.

Scenario 4

Entity Taxdemo4 and Entity Taxdemo5 both own Tax Security4 (equity). At the time of a dividend Eagle Accounting applies the following tax withholding and tax reclaim dividends:

1. Eagle Accounting applies a 15.5% Tax Withholding rate, and a 5% Tax Reclaim rate.
   • Eagle Accounting applies these rates when an entity and security match is not found in the Global Specific Tax Rate table.
   • Eagle Accounting does find an Entity, Issue Tax Type, Distribution Type, and Issue Country match in the Global Tax Override table.
   • Eagle Accounting then searches the Global Tax table for the best possible match where the Override Indicator is set to Yes. Eagle Accounting finds the best possible match with:
     • Entity Tax Type of Mutual Fund
     • Entity Tax Qualifier of Level 4
     • Entity Country of US
     • Issue Tax Type of Standard
     • Issue Country of GB
     • Primary Exchange of All
2. Eagle Accounting applies a Tax Withholding rate of 0.0% and a Tax Reclaim rate of 0.0%.
   • This occurs because Eagle Accounting does not find a match in either the Global Specific Tax table, or in the Global Override Tax table.
   • Eagle Accounting then searches the Global Tax table for the best possible match where the Override Indicator is set to No. Eagle Accounting does not find a match, so the Tax Reclaim Rate is set to 0.

Scenario 5

Entity Taxdemo5 owns security short position of Tax Security5. At the time a dividend is created:

• No tax withholding is applied. Eagle Accounting does not apply Tax Withholding and Tax Reclaim rates for short positions; therefore, the dividend payable record is created with 0% Tax Withholding and 0% Tax Reclaim rate.