Accruals on a Fixed Income Position

When Eagle Accounting runs Interest accruals on a fixed income position, Eagle Accounting follows the following hierarchy when applying tax withholding and reclaim:

1. Eagle Accounting does not process tax withholding or reclaim on short positions, so if the position is short, Eagle Accounting exits the tax withholding process.

2. Eagle Accounting first looks at the entity's Tax Accounting Method. If the value in the Entity's Tax Accounting Method is set to Gross Income, Eagle Accounting sets the tax rates to zero, and exits the tax withholding process.

3. Eagle Accounting then looks to the Accrue Interest Tax Indicator field on the entity. If this field is set to No, on a daily basis (non coupon entitlement date), Eagle Accounting sets the tax rate to zero and exits the tax withholding process.

4. If the entity's Tax Accounting Method is not Gross Income, and Accrue Interest Tax Indicator is set to Yes, Eagle Accounting then looks at the Global Specific Tax Rate table for an applicable tax rate and tax reclaim rate, based on an entity, security, and Effective Date combination that has a Distribution Type equal to Interest. If it finds a match, Eagle Accounting applies the tax rate and exits the tax withholding process. If it cannot find a match, Eagle Accounting looks through the global Override Tax Treaty for a match.

5. If Eagle Accounting does not find a match in the Global Specific Tax table, the program searches the Global Override Tax Treaty table for an Entity, Issue Country, Issue Tax Type, and Effective Date combination. If Eagle Accounting does find a match for the combination in the Global Override Tax Treaty, this triggers Eagle Accounting to search the Global Tax table for the best possible match where the Override Indicator field is set to Yes (see below for best possible match criteria). If Eagle Accounting does not find a match in the Global Override Tax Treaty, Eagle Accounting searches the Global tax Treaty table for the best possible match where the Override Indicator is set to No.

6. Finally, Eagle Accounting searches the Global Tax Table for the best possible match where Override Indicator is set to No, based on the following fields: Entity Country, Issue Country, Entity Tax Type, Entity Tax Qualifier, Issue Tax Type, Primary Exchange, and the Begin and End Date of a tax rule. If a tax rate is found, Eagle Accounting applies that rate; if no match is found, Eagle Accounting applies zero to the tax withholding and reclaim rates. While in the Global Tax table, Eagle Accounting tries to find the most restricting match.

Eagle Accounting processes matching sequentially, as follows:

1. Issue Country, (must be exact match)

2. Entity Country, (must be exact match)

3. Entity Tax Type, (must be exact match)

4. Distribution Type (must be exact match)

5. Effective Date of processing (has to be during an applicable tax period).