Czech Republic: new statutory deadline for standard reclaims
Clearstream Banking1 would like to inform customers that effective
1 July 2017
the amendment of the Income Tax Act published in the collection of Laws of the Czech Republic as Act no. 61/2017, will harmonise the reclaim statutory deadline to two years.
The statutory deadline for reclaiming withholding tax was three years after the year in which the respective income payment was made.
In rare cases, the statutory deadline was reduced from three years to 60 days, depending on the issuer. According to Czech Tax Code, Article 237 of the Act no. 280/2009, if the receiver of the income has any doubts or questions related to the tax withheld, a request can be sent to the institution (in this case, the issuer) within 60 days from the payment date. If this deadline is met, the issuer has a 30 day period to answer/process the request.
Some issuers decided to reduce their administration associated to the dividend payments and to apply this 60 day deadline. Even though this deadline represented a deviation from standard market procedure, it remained compliant with the local legislation as previously explained.
The amendment to the Income Tax Act, §38d, withholding tax section, introduces a new statutory deadline of two years (24 months) from the date of the income payment, applicable to all securities with no possibility for the issuers to reduce it.
Impact on customers
For all income payments processed from 1 July 2017, the new statutory deadline for reclaiming withholding tax is two years from the date when the income was paid.
The deadline by which Clearstream Banking must receive the documentation for a standard refund application is at the latest two months before the statutory deadline.
Note: Any reclaim of tax related to payments processed prior to 1 July 2017 will be subject to the previous statutory deadline that is three years after the year in which the respective income payment was made or 60 days if requested by the issuer.
For further information, please contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services or your Relationship Officer.
1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking Frankfurt (CBF) customers using CreationOnline), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.