Poland: Extension of relief at source service until 30 June 2020

08.01.2020

Note: This Announcement, originally published on 7 October 2019, has been updated to extend the relief at source service until 30 June 2020. The changes have been highlighted.

Clearstream Banking1 informs customers that our Polish depository Bank Handlowy S.A. extended their relief at source service until 30 June 2020 for certain categories of beneficiaries and regardless of the PLN 2 million limit.

Effective

immediately

the following relief at source process is applicable to the eligible beneficial owners. A quick refund is also available to the same categories of investors who missed the relief at source deadline.

This is further to Announcements A19017, A19083 and A19087.

Background

In January 2019 the Polish Ministry of Finance issued an Ordinance confirming the exemption of certain institutions from monitoring the PLN 2 million threshold. This ordinance allowed our depository to offer a limited relief at source service to certain categories of investors.

In June 2019, the Polish Ministry of Finance amended the Ordinance, extending the waiver for certain institutions from monitoring the PLN 2 million threshold from 30 June 2019 to 31 December 2019.

In January 2020, the Polish Ministry of Finance amended the Ordinance, to extend the waiver again to 30 June 2020.

Based on this extended deadline, our depository decided to enhance its relief at source service by offering it to additional group of investors.  Our depository also confirmed a possibility to apply for a quick refund when the relief at source could not be met by the investors.

Impact on customers

To obtain relief at source and quick refund the following eligible beneficial owners must be pre-approved by our depository who will perform due diligence based on the documentation provided for each beneficial owner. The due diligence will be performed once per beneficial owner.

Important note: This procedure excludes the Euro-denominated mortgage bonds deposited with KDPW.

Eligible beneficial owners

The following types of entities are eligible to the relief at source and quick refund service:

Based on domestic law


Government bonds (treasury bills, treasury bonds, municipal bonds)

Corporate bonds, covered bonds and PLN denominated mortgage bonds

Equities

Individuals (resident and non-resident)

19%

19%

n/a

Foreign central banks (bonds purchased on or after 1 November 2015)

0%

n/a

n/a

Supranational or international organisations of which Poland is a member

0%

0%

0%

Based on DTTs

Foreign central banks (bonds purchased prior 7 November 2015)

DTT rate (0% or reduced, as applicable)

n/a

n/a

Foreign central banks

n/a


DTT rate (0% or reduced, as applicable)

DTT rate (0% or reduced, as applicable)

Foreign governments, foreign administrative subdivisions and foreign local authorities:

DTT rate (0% or reduced, as applicable)

DTT rate (0% or reduced, as applicable)

DTT rate (0% or reduced, as applicable)

Foreign banks and investment firms (as defined in EU MiFiD regulations)

DTT rate (0% or reduced, as applicable)

DTT rate (0% or reduced, as applicable)

DTT rate (0% or reduced, as applicable)

Entities specifically mentioned in the DTT signed between Poland and their country of residence

DTT rate (0% or reduced rate, as applicable). These entities are usually governmental bodies specifically defined in the treaty.

DTT rate (0% or reduced rate, as applicable). These entities are usually governmental bodies specifically defined in the treaty.

DTT rate (0% or reduced rate, as applicable). These entities are usually governmental bodies specifically defined in the treaty.

Supranational or international organisations of which Poland is a member

0%

0%

0%

Due diligence (pre-approval)

Eligible beneficial owners, who wish to apply for relief or exemption at source or through quick refund, must first be pre-approved by the depository.

The following certification must be provided by the stated deadline to allow the depository to perform the due diligence and confirm the eligibility of the beneficial owner to the relief at source or quick refund.

The due diligence performed by the depository consists of the verification of the certification provided (if correctly filled in, stamped, apostilled etc…) as well as specific researches on the correctness of information provided, as well as compliance checks on beneficial owners. For instance, if a beneficial owner declares to be an investment firm, the depository will verify this information in the available registrars.

The due diligence verification is a key element to apply relief at source or quick refund and customers must be aware that providing the required documentation does not guarantee the eligibility to the relief at source or quick refund.

The due diligence is performed once per beneficial owner. If approved, the beneficial owner details will be registered by the depository in their books and no further verification will be performed unless the situation of the beneficial owner changes. In case of changes of address, name, status, etc. the beneficial owner has the obligation to immediately advise Clearstream Banking and provide new documentation supporting the changes.

Documentation requirements

Debt securities

To obtain relief at source or quick refund on income (interest and redemption) distributed by Government bonds(treasury bills, treasury bonds, municipal bonds), Corporate bonds, covered bonds and PLN denominated mortgage bonds the documentation requirements depend on the type of investor as follows:

For individuals, only the reduced rate of 19% can be obtained upon disclosure of the status. This procedure remains unchanged, please refer to A19017 for further details.

For all other types of investors

  • A One-Time Certificate (OTC) for Polish debt securities
    The original, completed and duly signed by the customer and specifying, among other things, whether the customer is the sole BO of all the Polish debt securities held in the account, must be provided once before the first income/redemption payment. It remains valid until revoked. Any changes to any details must be communicated in a new OTC.
  • A Power of Attorney (POA): if the documentation is signed by a third party. In case of several parties involved, the full chain of POAs must be provided.
  • A Beneficial Owner list (BO list) via the BO Upload facility that includes:
    • The complete data of the central bank;
    • The applicable withholding tax rate;
    • The common code or ISIN;
    • The nominal amount or number of securities; and
    • The applicable tax rate.
    • It must be provided before each interest payment.

and

For foreign central banks, foreign governments, foreign administrative subdivisions and foreign local authorities:

  • An original Certificate of Residence (COR), issued by the beneficial owner’s local tax authorities in the year for which it is to be used. It must include the beneficial owner’s full name and address and remains valid until the end of the respective calendar year. Electronic CORs are accepted; please refer to A18103 for further details on their acceptance.
  • A Beneficial Owner Declaration, the original signed by the beneficial owner or its representative under a POA.
  • An Establishment document: document confirming the existence of the entity and its eligibility to the benefits of relief at source. This document can be the statuses, prospectus, articles of association, article of incorporation, extract from proper registrars, licenses etc.

For foreign banks and investment firms (as defined in EU MiFiD regulations):

  • An original Certificate of Residence (COR), issued by the beneficial owner’s local tax authorities in the year for which it is to be used. It must include the beneficial owner’s full name and address and remains valid until the end of the respective calendar year. Electronic CORs are accepted; please refer to A18103 for further details on their acceptance.
  • A Beneficial Owner Declaration, the original signed by the beneficial owner or its representative under POA.
  • An Establishment document: document confirming the existence of the entity and its eligibility to the benefits of relief at source. This document can be the statuses, prospectus, articles of association, article of incorporation, extract from proper registrars, licenses etc.
  • A Banking/investment firm license or Client statement confirming the status of the bank/investment firm and reference to publicly available official registrar which confirms such scope of the banking/investment firm license.

For supranational or international organisations of which Poland is a member:

  • A Beneficial Owner Declaration, the original signed by the beneficial owner or its representative under a POA.
  • An Establishment document: document confirming the existence of the entity and its eligibility to the benefits of relief at source. This document can be the statuses, prospectus, articles of association, article of incorporation, extract from proper registrars, licenses etc.

For entities specifically listed in the DTT signed between Poland their country of residence:

  • An original Certificate of Residence (COR), issued by the beneficial owner’s local tax authorities in the year for which it is to be used. It must include the beneficial owner’s full name and address and remains valid until the end of the respective calendar year. Electronic CORs are accepted; please refer to A18103 for further details on their acceptance.
  • A Beneficial Owner Declaration, the original signed by the beneficial owner or its representative under a POA.
  • An Establishment document: document confirming the existence of the entity and its eligibility to the benefits of relief at source. This document can be the statuses, prospectus, articles of association, article of incorporation, extract from proper registrars, licenses etc.

Calculation of the purchase price

In addition to the above documentation, to calculate the discount price for a redemption on bonds, the purchase price must be provided. The discount price will be the result of the redemption price minus the purchase price. Customers providing the purchase price without requesting a reduced tax rate do not need to provide an OTC. Please refer to A19017 for further details.

Equities

To obtain relief at source on income distributed by Polish equities the documentation requirements depend on the type of investor as follows:

For individuals: Not applicable.

For all other types of investors

  • A One-Time Certificate (OTC) for Polish Equites
    The original, completed and duly signed by the customer and specifying, among other things, whether or not the customer is the sole BO of all the Polish equities held in the account, must be provided once before the first income payment. It remains valid until revoked. Any changes to any details must be communicated in a new OTC.
  • A POA, if the documentation is signed by a third party. In case of several parties involved, the full chain of POAs must be provided.

and

For foreign central banks, Foreign governments, foreign administrative subdivisions and foreign local authorities:

  • An original Certificate of Residence (COR), issued by the beneficial owner’s local tax authorities in the year for which it is to be used. It must include the beneficial owner’s full name and address and remains valid until the end of the respective calendar year. Electronic CORs are accepted; please refer to A18103 for further details on their acceptance.
  • A Beneficial Owner Declaration:  the original signed by the beneficial owner or its representative under POA.
  • An Establishment document: document confirming the existence of the entity and its eligibility to the benefits of relief at source. This document can be the statuses, prospectus, articles of association, article of incorporation, extract from proper registrars, licenses etc.

For foreign banks and investment firms (as defined in EU MiFiD regulations):

  • An original Certificate of Residence (COR), issued by the beneficial owner’s local tax authorities in the year for which it is to be used. It must include the beneficial owner’s full name and address and remains valid until the end of the respective calendar year. Electronic CORs are accepted; please refer to A18103 for further details on their acceptance.
  • A Beneficial Owner Declaration:  the original signed by the beneficial owner or its representative under a POA.
  • An Establishment document: document confirming the existence of the entity and its eligibility to the benefits of relief at source. This document can be the statuses, prospectus, articles of association, article of incorporation, extract from proper registrars, licenses etc.
  • A Banking/investment firm license or Client statement confirming the status of the bank/investment firm and reference to publicly available official registrar which confirms such scope of the banking/investment firm license.

For supranational or international organisations of which Poland is a member:

  • A Beneficial Owner Declaration:  the original signed by the beneficial owner or its representative under a POA.
  • An Establishment document: document confirming the existence of the entity and its eligibility to the benefits of relief at source. This document can be the statuses, prospectus, articles of association, article of incorporation, extract from proper registrars, licenses etc.

For entities specifically listed in the DTT signed between Poland their country of residence:

  • An original Certificate of Residence (COR), issued by the beneficial owner’s local tax authorities in the year for which it is to be used. It must include the beneficial owner’s full name and address and remains valid until the end of the respective calendar year. Electronic CORs are accepted; please refer to A18103 for further details on their acceptance.
  • A Beneficial Owner Declaration, the original signed by the beneficial owner or its representative under a POA.
  • An Establishment document: document confirming the existence of the entity and its eligibility to the benefits of relief at source. This document can be the statuses, prospectus, articles of association, article of incorporation, extract from proper registrars, licenses etc.

Translation, notarisation and apostille

Documents provided in a foreign language will be translated in Poland by a sworn translator. The cost will be charged as out of pocket expenses. To limit the cost and delay, it is recommended to use the templates provided by Clearstream Banking’s depository or to provide the documents in English if no Polish version exists. 

The Power of Attorney, Beneficial ownership declaration and reclaim declaration must be notarised and apostilled. 

Additional fee

An additional fee of EUR 225 is charged by the depository for the due diligence. The cost will be charged as out of pocket expenses once per beneficial owner.

Deadline for the receipt of documents

Relief at source/due diligence

Customers applying for relief at source must be pre-approved through the due diligence process. The deadline to provide the original documentation is at the latest 10 business days by 10:00 CET before the income payment date to which it applies.

The BO list must be uploaded at the latest 2 business days by 10:00 CET before the income payment date to which it applies.

Customers will be informed at the latest 1 business day before payment date in case of non-approval of a beneficial owner by our depository.

Quick refund

Customers applying for quick refund must also be pre-approved through the due diligence process.

Deadlines to receive the original documentation and the BO list in the case of a quick refund are:

  • Original documentation 4 business days before the last business day of the month in which the payment was made.
  • BO list 1 business day before the last business day of the month in which the payment was made.

Customers will be informed at the latest on the first  business day of the following month  in case of non-approval of a beneficial owner by our depository.

Standard refund

Customers who missed the relief at source or quick refund deadline, or who were not approved as eligible to relief at source/quick refund, may apply for a standard refund. Please refer to A19071 for further details on the standard refund process applicable.

Further information

All forms can be found on the Clearstream website under Tax Forms to use - Poland.

For further information, customers may contact Clearstream Banking Client Services, their Relationship Officer or Tax Help Desk.

------------------------------

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.