Icelandic equities - standard refund - rates, eligibility, documentation, deadlines etc.

29.01.2018

Who can apply for a standard refund?

A standard refund of withholding tax on dividend payments and transactions from Icelandic equities is available through Clearstream Banking for the following beneficial owners, if the required certification has not been provided within the relief at source deadlines.

Eligible beneficial owners

Effective tax rate after refund

Tax refund available

Residents of Double Taxation Treaty (DTT) countries

DTT rate

22% minus DTT rate

Non-resident legal entities20%2%

Important notes:

  • Transactions
    Reclaim of tax withheld on sales of equities will be processed based on the Clearstream Banking transaction reference and the actual tax amount withheld.

Documentation requirements

In order to benefit from a standard refund of withholding tax on income from Icelandic equities, customers must ensure that we receive the following documents. The templates of the documents are available on our Tax forms to use section.

To apply for a standard refund, you must submit to Clearstream Banking, in the original, the following per reclaim:

  • Form RSK 5.42 Application under Double Taxation Conventions for an Exemption from Icelandic Taxation
    Only the document entitled “for the Icelandic Tax Authorities” is to be sent to Clearstream Banking.
    Form RSK 5.42 must be dated and signed by the beneficial owner or its legal representative under power of attorney. It must also be dated, signed and stamped, by the local tax authority of the beneficial owner.
    If the refund is granted, the Form RSK 5.42 is valid for five years, during which period it need not be included with any further reclaim application.
    Guidance on how to complete the Form RSK 5.42, can be found in our publication “Completing tax forms in the Icelandic market” which is available in the Tax forms to use section.
  • Form RSK 5.43 Application under Double Taxation Conventions for a Refund of Taxes Paid
    Only the document entitled “for the Icelandic Tax Authorities” is to be sent to Clearstream Banking.
    Form RSK 5.43 must be dated and signed by the beneficial owner or its legal representative under power of attorney.
    Guidance on how to complete the Form RSK 5.43, can be found in our publication “Completing tax forms in the Icelandic market” which is in the Tax forms to use section.
  • Detailed list of income/transactions for which a refund of tax is requested
    The spreadsheet template to be used, reflects the mandatory information needed and, therefore, this exact template must be used.
    The sum must exactly match the amount reclaimed and populated in field 16 of Form RSK 5.43. The spreadsheet must be printed, dated and signed, and an electronic version on CD-ROM must be included with the reclaim.
  • Power of Attorney, if the reclaim forms are completed by a third party on behalf of the beneficial owner.
  • Credit Advice, containing information required when filing a reclaim. It must be under the letterhead of the customer or of the customer’s agent and include the respective Clearstream Banking account number.
    The full chain of credit advices from final beneficiary to Clearstream Banking must be provided.
  • Letter of Request to Clearstream Banking for Refund of Icelandic Withholding Tax, per ISIN and period of payment The Letter of Request must refer to the Detailed list of income/transactions provided in attachment to Form RSK 5.43.
    The reference of the tax refund must be left blank. We will add this unique identification number.

Statutory deadline

The statutory deadline for reclaiming withholding tax on income from Icelandic securities is six years after the date on which the tax was withheld. The deadline by which Clearstream Banking must receive the documentation is at least two months before the statutory deadline. All standard refund applications received after this deadline will be processed by Clearstream Banking on a “best efforts” basis. However, in such cases, Clearstream Banking will apply an extra charge and accepts no responsibility for forms that have not reached the Icelandic Tax Authorities by the date considered as being the statute of limitations deadline.

With respect to tax reclaims in general, customers are reminded that Clearstream Banking accepts no responsibility for their acceptance or non-acceptance by the tax authorities of the respective country. It is the customer’s responsibility to determine any entitlement to a refund of tax withheld, to complete the required documentation correctly and to calculate the amount due.

Receipt of refunded amounts

The estimated time for receiving a standard refund is six to twelve months from the date on which the standard refund application was received by the Icelandic Tax Authorities, although this can vary depending on when the application was filed and the complexity of the information supplied in the reclaim form.

Notes on tax reclaims

Customers warrant the completeness and accuracy of the information they supply to Clearstream Banking.

It is the customer's responsibility to determine any entitlement to a refund of tax withheld, to complete the forms required correctly and to calculate the amount due. Clearstream Banking is under no obligation to carry out any investigation in respect of such information.

With respect to tax reclaims in general, customers are reminded that Clearstream Banking accepts no responsibility for their acceptance or non-acceptance by the tax authorities of the respective country.