Foreign shares in collective safe custody: Relief at source and quick refund on Dutch DRs in 2019
This announcement reflects the Dutch Depository Receipt (DR) dividend events taking place in 2019 and includes the Clearstream Banking1 procedure and deadlines for obtaining relief at source and/or quick refund for ISINs US9047847093 and USN070592100.
Important Note: The original Depository Trust Company (DTC) notice with full requirements is available from DTC’s website (CUSIP or security name can be used to retrieve the notice). Customers are strongly encouraged to obtain this notice to ensure they are aware and comply with the full requirements for these events.
Tax procedure for relief at source or quick refund
The dividend payments distributed by the above-mentioned securities are subject to 15% Dutch withholding tax by default in Clearstream Banking.
Customers may apply for relief at source and/or quick refund for their underlying beneficial owners according to the below tax procedure for Dutch depository receipts (DRs).
Eligible beneficial owners
The following types of beneficial owners are eligible or may be eligible to either relief at source and/or quick refund. Customers should refer to the DTCC notice to assess their eligibility to one or both processes:
- Residents of a double taxation treaty country (DTT) listed in the original DTCC notice;
- Tax-exempt entities according to U.S. article 36 - Charities under 501(c)(3), 509(a)(1), 509(a)(2), 509(a)(3), 17-(b), and U.S. article 35 - Pensions and IRAs under 401(a), 401(k), 457(b), 403(b), 408, 408(a);
- Foreign tax-exempt entity domiciled in a country in which it is not subject to tax on profits, as long as that state has an exchange of tax information agreement in place with the Netherlands, and that entity would not be subject to profits tax in the Netherlands if it were based therein.
In order to benefit from relief at source or quick refund on income from Dutch DRs, customers will need to ensure that the following documents are provided to Clearstream Banking before the respective deadline of the ISIN listed in the table below.
Customers are required to submit a valid electronic instruction by SWIFT message (please refer to Announcement C18050 for full formatting requirements) before the Clearstream Banking deadline (date/time). One electronic instruction per tax rate is required. The customer instruction must include:
- Customer account number;
- ISIN code;
- Corporate ID;
- Record date;
- Total holding;
- Claim type;
- Tax rate and number of DRs to apply per each beneficial owner;
- Entity type;
- Beneficial owner name;
- Beneficial owner address for tax purpose;
- Country of tax residence (ISO 2-digit format);
- Dutch tax identification number (TIN);
- The total holding that remains undisclosed, if applicable.
All beneficial owners wishing to apply for relief at source or quick refund must be registered with the Dutch tax authorities and receive a Dutch tax ID number.
In certain cases, eligible beneficial owners are those with share positions of 5000 shares or more. For further details, please refer to the DTCC notice.
Original 2019 tax year 6166
The document is required only for tax-exempt entities according to U.S. article 35 applying to relief at source.
Certificate of residence (COR)
The COR is only required for:
- Eligible DTT residents;
- Foreign tax-exempt entities.
Articles of association, trust deed, annual account and/or pension plan
This documentation is only required for foreign tax-exempt entities in addition to the COR.
Submission of original documentation
The relevant documentation must be submitted to Clearstream Banking S.A. (CBL) via registered post (if applicable) to the following address before the dedicated Clearstream Banking deadline:
Clearstream Banking S.A.
Attention: OTL Luxembourg
42, Avenue JF Kennedy
Deadlines and fees
In order to benefit from a relief at source and/or quick refund from Dutch DRs, customers must ensure that Clearstream Banking receives the above-described documents plus any other documents as required in the relevant DTCC notice for the below-mentioned ISINs by the indicated deadlines:
Relief at source deadline
Quick refund deadline
ADR UNILEVER (NY REGISTERED SHARE)(1 SHS)
ADR ASML HOLD.NV REGS REG 1DR/1SHS
Customer's legal liabilities
By using the relief at source or quick refund service, the customer has obligations and liabilities as follows:
- The customer will indemnify and hold Clearstream Banking harmless to any loss, liability or expense sustained by Clearstream Banking as a result of any act done in reliance upon the customer's certification or as a result of the inaccuracy of the information contained in the certification. The customer's liability under this indemnity includes, but is not limited to, reimbursement to the relevant tax authorities, issuer, paying agent, ADR depositary, or any other person or entity for under-withheld tax, or for the erroneous payment of a treaty benefit at source, for foreign exchange fees, for interest on under-withheld funds, and for administrative costs.
- The customer will be obligated to supply to the source country's tax authority and the beneficial owner's home country tax authority which may be the U.S. Internal Revenue Service (IRS), or another appropriate authority, the supporting documentation.
- Clearstream Banking will debit the customer's cash account for any debit of Clearstream Banking accounts made at DTC in response to the request of the relevant tax authorities, the paying agent, or ADR depositary for the amount of the tax relief received at source and related costs.
- At the request of the relevant tax authorities, any customer that uses the tax relief or quick refund service but fails to comply with the procedures may be prohibited from using the EDS service to obtain the favourable rate for future distributions.
1. This Announcement is published by Clearstream Banking AG (CBF), registered office at Mergenthalerallee 61, 65760 Eschborn, Germany, registered with the Commercial Register of the District Court in Frankfurt am Main, Germany, under number HRB 7500.