In Focus – An Update on the Treaty Eligibility Challenges of Revenue Ruling 81-100 Group Trusts

November 26, 2019
In this edition of In Focus, we turn to France and Indonesia to discuss the treaty eligibility challenges 81-100 Group Trusts encounter when investing in these markets.

When investing in foreign markets, 81-100 Group Trusts often experience issues obtaining tax treaty benefits. Foreign tax authorities often are not assured that the underlying pension plan participants within the group trust are treaty eligible, and therefore require proof in the form of documentation at the underlying participant level. This is a burdensome requirement for the group trust and compliance is difficult.

An “81-100 Group Trust” refers to a collective investment trust, group trust, or collective investment fund that is a commingled pool governed by ERISA. It qualifies for tax exempt treatment under Internal Revenue Service (IRS) Revenue Ruling 81-100 (as modified by Revenue Ruling 2004-67 and Revenue Ruling 2011-1) because all of its assets are derived from either qualified plans or certain governmental plans (group trust) pools that are exempt from US taxation under Section 501(a) of the Internal Revenue Code (IRC).

In this edition of In Focus, we turn to France and Indonesia to discuss the treaty eligibility challenges 81-100 Group Trusts encounter when investing in these markets. Click here to read more on Belgium and Denmark, or click here to read more on Austria, Japan, Switzerland, and Sweden.

Markets of Investment That Present Tax Treaty Challenges


In 2012, the French Tax Authorities issued a statement of practice outlining treaty eligibility requirements for “simple collective trusts of pensions.” Based on a recent interpretation of the statement of practice, local subcustodians are no longer supporting tax treaty relief at source for Revenue Ruling 81-100 Group Trusts.

The current language of the certificate of residence (CoR) issued to a Revenue Ruling 81-100 Group Trust is deemed insufficient to support tax treaty benefits in France. The current CoR states that “the fund is a group trust arrangement described in Revenue Ruling 81-100, and, to the best of our knowledge, each participant is a resident of the United States.” However, pursuant to Revenue Ruling 2014-24, plans eligible to participate in 81-100 Group Trusts may include Puerto Rican retirement plans. This is problematic because the tax treaty between the US and France does not extend its benefits to pension funds established in the US territories. For this reason, the French Tax Authorities are requiring full transparency to the underlying participating pensions in the Group Trust.

Pursuant to the statement of practice, Revenue Ruling 81-100 Group Trusts seeking tax treaty benefits in France through the standard tax reclaim procedure must provide the following documentation:

  • Form 5000 and Form 5001 for the group trust
  • A CoR for the group trust
  • A list of all members of the group trust
  • A list of all members of the group trust that are US pension funds covered by the following Internal Revenue Code (IRC) sections, where all members must be established and managed exclusively for the purpose of providing retirement benefits and hold less than 10 percent of the voting shares of the French distributing entity:
    • IRC Section 401(a) Qualified Retirement Plans
    • IRC Section 403(b) Tax Deferred Annuity Contracts
    • IRC Section 457 Deferred Compensation Plans
  • An attestation issued by the US tax authorities for each pension fund within the group trust stating that it has been established and operates in accordance with the above-referenced IRC sections (a certificate of residence for each pension fund)
  • An attestation stating the percentage of rights to French dividends received by the collective trust, attributable to pension funds that come under the reference IRC sections

Investors will need to produce the referenced documents on an annual basis.

The statute of limitations for filing tax reclaims in France is December 31 of the second year following the year of the dividend payment.


In January of 2019, the Indonesia Directorate General of Tax (DGT) issued a new simplified treaty application DGT form. Unlike the two previous DGT forms, the new form applies to all taxpayers, including Revenue Ruling 81-100 group trusts. The new DGT form can be certified by the investor’s local tax authority or the form can be accompanied by a CoR.

Although the application process has been somewhat simplified, the issuers’ withholding agents determine treaty eligibility of investors. Some withholding agents maintain that Revenue Ruling 81-100 Group Trusts are not deemed beneficial owners for tax treaty eligibility purposes and that the language of the CoR confirms this by referring to the entity as a “group trust arrangement.”

Other withholding agents determine treaty eligibility based on how investors complete part V of the DGT form. Part V of the form aims to identify treaty abuse by questioning whether the investing entity demonstrates sufficient economic substance.

Language in Form 6166 Causing Tax Treaty Eligibility Issues

The language on the Form 6166 issued to group trusts has undergone some changes in the past years. An older version of the 6166 issued to group trusts used to state “I certify that, to the best of our knowledge, the above named entity is a trust forming part of a pension, profits sharing, or stock bonus plan qualified under 401(a) of the US Internal Revenue Code, which is exempt from US taxation under section 501(a), and is a resident of the United States for the purposes of US taxation.” Over time, the content of the Form 6166 has changed to state “I certify that the above named fund is a group trust arrangement described in Revenue Ruling 81-100, and to the best of our knowledge, each participant is a resident of the United States.” The current wording of the 6166 may imply to foreign tax authorities that the group trust is not eligible for treaty benefits in its own right, but only to the extent of its participants being treaty eligible.

Recent Developments

As a result of a proposal submitted by the Association of Global Custodians (AGC), in conjunction with the American Bankers Association (ABA), the IRS has agreed to revise the wording of the 6166 issued to Revenue Ruling 81-100 Group Trusts. The newly worded CoRs will certify that the fund is a Revenue Ruling 81-100 Group Trust, a resident of the US for purposes of US taxation, exempt from US taxation, and consists exclusively of pensions, retirement, or similar arrangements that are themselves exempt from US taxation.

This new language is more closely aligned with how tax treaties define eligible pension funds. The newly worded CoRs are due to be released prior to the end for 2019. 

BBH Perspective

In order to protect our client’s rights to reduced withholding tax rates, BBH continues to apply for relief at source and to file reclaims in markets where preferential tax rate opportunities are available to group trusts under the tax treaty between the two countries. BBH is an active participant in the AGC which provides a forum for addressing issues which create impediments for our clients seeking treaty benefits and local law reduction opportunities. In this manner, BBH was able to actively participate in the AGC’s proposal to revise the language of the 6166 issued to Revenue Ruling 81-100 group trusts which was recently accepted by the IRS.

For more information please contact your relationship manager or the Global Tax Services Group.

Brown Brothers Harriman & Co. (“BBH”) may be used as a generic term to reference the company as a whole and/or its various subsidiaries generally. This material and any products or services may be issued or provided in multiple jurisdictions by duly authorized and regulated subsidiaries. This material is for general information and reference purposes only and does not constitute legal, tax or investment advice and is not intended as an offer to sell, or a solicitation to buy securities, services or investment products. Any reference to tax matters is not intended to be used, and may not be used, for purposes of avoiding penalties under the U.S. Internal Revenue Code, or other applicable tax regimes, or for promotion, marketing or recommendation to third parties. All information has been obtained from sources believed to be reliable, but accuracy is not guaranteed, and reliance should not be placed on the information presented. This material may not be reproduced, copied or transmitted, or any of the content disclosed to third parties, without the permission of BBH. Pursuant to information regarding the provision of applicable services or products by BBH, please note the following: Brown Brothers Harriman Fund Administration Services (Ireland) Limited and Brown Brothers Harriman Trustee Services (Ireland) Limited are regulated by the Central Bank of Ireland, Brown Brothers Harriman Investor Services Limited is authorised and regulated by the Financial Conduct Authority, Brown Brothers Harriman (Luxembourg) S.C.A is regulated by the Commission de Surveillance du Secteur Financier. All trademarks and service marks included are the property of BBH or their respective owners. © Brown Brothers Harriman & Co. 2019. All rights reserved. IS-05681-2019-11-22

This browser is not fully supported by our public website and may not display or function as expected for this reason. Please note, the Infuse Portal and BBH client applications fully support the IE 11 browser.

Important Information for Non-U.S. Residents

You are required to read the following important information, which, in conjunction with the Terms and Conditions, governs your use of this website. Your use of this website and its contents constitute your acceptance of this information and those Terms and Conditions. If you do not agree with this information and the Terms and Conditions, you should immediately cease use of this website. The contents of this website have not been prepared for the benefit of investors outside of the United States. This website is not intended as a solicitation of the purchase or sale of any security or other financial instrument or any investment management services for any investor who resides in a jurisdiction other than the United States1. As a general matter, Brown Brothers Harriman & Co. and its subsidiaries (“BBH”) is not licensed or registered to solicit prospective investors and offer investment advisory services in jurisdictions outside of the United States. The information on this website is not intended to be distributed to, directed at or used by any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. Persons in respect of whom such prohibitions apply must not access the website.  Under certain circumstances, BBH may provide services to investors located outside of the United States in accordance with applicable law. The conditions under which such services may be provided will be analyzed on a case-by-case basis by BBH. BBH will only accept investors from such jurisdictions or countries where it has made a determination that such an arrangement or relationship is permissible under the laws of that jurisdiction or country. The existence of this website is not intended to be a substitute for the type of analysis described above and is not intended as a solicitation of or recommendation to any prospective investor, including those located outside of the United States. Certain BBH products or services may not be available in certain jurisdictions. By choosing to access this website from any location other than the United States, you accept full responsibility for compliance with all local laws. The website contains content that has been obtained from sources that BBH believes to be reliable as of the date presented; however, BBH cannot guarantee the accuracy of such content, assure its completeness, or warrant that such information will not be changed. The content contained herein is current as of the date of issuance and is subject to change without notice. The website’s content does not constitute investment advice and should not be used as the basis for any investment decision. There is no guarantee that any investment objectives, expectations, targets described in this website or the  performance or profitability of any investment will be achieved. You understand that investing in securities and other financial instruments involves risks that may affect the value of the securities and may result in losses, including the potential loss of the principal invested, and you assume and are able to bear all such risks.  In no event shall BBH or any other affiliated party be liable for any direct, incidental, special, consequential, indirect, lost profits, loss of business or data, or punitive damages arising out of your use of this website. By clicking accept, you confirm that you accept  to the above Important Information along with Terms and Conditions.

1BBH sponsors UCITS Funds registered in Luxembourg, in certain jurisdictions. For information on those funds, please see

captcha image

Type in the word seen on the picture

I am a current investor in another jurisdiction