Turkey: Validity period details for Certificates of Tax Residence
Further to announcement A17161 dated 4 December 2017 regarding the amended deadline for submission of the Certificate of Tax Residence, Clearstream Banking1 would like to remind customers of the format requirements applicable to the validity period of such a certificate.
In order to apply the Certificate of Tax Residence for a beneficial owner that is claiming reduced tax rate on a dividend payment via relief at source, all Turkish issuers request that the Certificate of Tax Residence has clear validity period details.
The Certificate of Tax Residence issued by the beneficial owner's local tax authority must include a validity period in the format (dd/mm/yyyy – dd/mm/yyyy).
If a local tax authority does not issue a Certificate of Tax Residence with the above format, then the certificate must, at a minimum, state “for the year YYYY”.
Should customers provide a Certificate of Tax Residence, on behalf of an underlying beneficial owner, with an “on the date” only (for example 19 January 2018), then Clearstream Banking and its custodian, TEB, will accept such a certificate and consider it valid from the “on the date” stated on the certificate until the end of the calendar year in which it is dated (for example, 19 January 2018 – 31 December 2018) under the following conditions:
- The Certificate of Tax Residence is also accepted by the paying issuer company of the dividend, to cover a payment date different from the date stated on the Certificate of Tax Residence; or
- In case of non-acceptance by the paying issuer, the customer will be able to provide another Certificate of Tax Residence on behalf of the underlying beneficial owner, covering the claimed payment date, within the issuer’s deadline, which may be within a very short time period.
Clearstream Banking will not take any responsibility in respect to any losses, claims, penalties, taxes or interest thereon, should the paying issuer not deem such a Certificate of Tax Residence (with the “on the date” only) as valid in order to:
- prove the tax residency of the underlying beneficial owner (certain paying issuers may interpret “on the date” as if the beneficial owner was a tax resident on that specific date only); or
- apply a reduced tax rate on a Turkish dividend payment.
Such responsibility remains solely with the Clearstream Banking customer.
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 AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.