Spain: Tax payment processing change

23.10.2019

Clearstream Banking1 informs customers that from

18 November 2019

tax processing related to income payments for Spanish taxable government and corporate bonds, will be adapted in line with CSDR2 requirements.

Customer impact

Interest payments

Customers will be paid in two steps:

  1. On payment date customers will receive income net at the default market tax rate;
  2. A second payment will be executed as soon as the tax credit is received by Clearstream Banking (as applicable depending on the beneficiary’s tax eligibility, certification and instructions). The time between the payments can vary depending on the issuer.

Reporting

MT564 and MT564 Income Pre-advice Report (IPAR)

For the first payment, the income amount will be reported at the default market tax rate. The second payment will not be reported via MT564 or IPAR as the value date is unknown but will be reported directly on an MT566 on the payment date.

MT566 and MT910

If there is a tax credit, a dedicated MT566 will report (among other amounts as usual) the Tax credit amount under field :19B::TAXC and Tax credit rate (difference between default tax rate and the customer effective tax rate) under field 92A::TAXC.

If subscribed to, an MT910 will also confirm the credit received.

MT940 and MT942

Reports will show two separate global cash credit entries.

Tax procedures

As tax relief at source on equities is not available, the payment of dividends will not be amended.

The tax procedures for obtaining reduced withholding tax rates at source, via quick refund or via standard refund remain unchanged. For specific details about income and tax processing on the Spanish market, please refer to the Market Link Guide – Spain and to the Market Taxation Guide – Spain.

Further information

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

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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.

2. CSD Regulation (EU) No 909/2014 art. 2 (29).