Standard refund - eligibility, documentation, deadlines - Danish equities

02.10.2019

Who can apply for a standard refund?

Beneficial owners can reclaim withholding tax on dividends using the standard refund procedure as follows:

Eligible beneficial owners

Effective rate of tax after refund

Tax refund
available a

Residents of Double Taxation Treaty (DTT) country

Tax treaty rate or 27%, whichever is lower

27% minus
the tax treaty rate b

Foreign governments and approved international organisations0%27%
Qualifying U.S. pension funds0%27%
Residents of a country with an international treaty or convention with Denmark15%12%

a. Expressed as a percentage of the gross dividend amount.
b. Amount of relief will be 0% if the DTT rate exceeds 27%.

Documentation requirements

The documents to be submitted to Clearstream Banking, by the prescribed deadlines in order to apply for standard refund of withholding tax on dividends on Danish equities vary depending on the type of beneficial owner, as follows:

Residents of a Double Taxation Treaty (DTT) country:

  • Place of residence statement (Form 02.051 for companies or Form 02.050 for private individuals); or
  • Certificate of Residence; - if form 02.051/02.50 are not provided

and

  • Power of Attorney for tax reclaim processes follow-up;
  • Letter of Request to Clearstream Banking for Reclaim of Danish Withholding Tax

Foreign governments and approved international organisations:

  • Request for Reclaim as a Foreign Government or International Organisation;
  • Power of Attorney for tax reclaim processes follow-up;
  • Letter of Request to Clearstream Banking for Reclaim of Danish Withholding Tax;
  • Proof of Tax Exemption.

Qualifying U.S. pension funds:

  • Free card ("frikort" - a copy);
  • Place of residence statement (Form 02.051 for companies or Form 02.050 for private individuals); or
  • Certificate of Residence; - if form 02.051/02.50 are not provided
  • Power of Attorney for tax reclaim processes follow-up;
  • Letter of Request to Clearstream Banking for Reclaim of Danish Withholding Tax.

Residents of a country with an international treaty or convention with Denmark:

  • Place of residence statement (Form 02.051 for companies or Form 02.050 for private individuals); or
  • Certificate of Residence; - if form 02.051/02.50 are not provided

and

  • Power of Attorney for tax reclaim processes follow-up;
  • Letter of Request to Clearstream Banking for Reclaim of Danish Withholding Tax

Furthermore, all reclaim requests must include sufficient supporting documentation to prove that:

  • The claimant has received the Danish dividend;
  • The claimant is the beneficial owner of the dividend:
  • Danish dividend tax has been withheld; and
  • The claimant is liable to pay tax in another country covered by a double taxation agreement at the time the dividend distribution was agreed, if a Double Taxation Treaty (DTT) application.

Consequently, when applying for a standard refund of withholding tax on dividends from Danish equities via Clearstream Banking, customers are requested to provide the following documentation, in addition to the normal reclaim documentation, as specified above per beneficial owner type:

  • Dividend voucher
    The documentation must state that Danish dividend tax has been withheld. You can see this on a voucher or dividend statement issued by the shareholder's depository bank, for example. This statement will most often include the date when the dividend distribution was approved.
  • Statement of account

    You need to document that the dividend has been deposited into the account. Attach a copy of the shareholder's statement of account, for example, possibly along with a swift confirmation or screen print from the bank system.
    If the dividend has been transferred via several banks, you need to submit documentation for all parts of the transfer.

  • Custody account statement
    Attach a custody account statement to give an overview of the shareholder's shareholding at the time when the dividend distribution was approved so that the number of shares at that time corresponds to the number of shares for which refund of Danish dividend tax is claimed.
    Moreover, the custody account statement must also state any shareholding movement for the period beginning at the end of most recent calendar year and until six months after the dividend distribution. If you make a claim within six months after the time of dividend distribution, the statement must show movements up until the time the claim was made.

  • Purchase voucher
    Documentation is required if the shareholder has bought or sold shares within a period of six months before and after the time when the dividend distribution was approved. Such documentation could be proof of trade, receipt or a SWIFT confirmation. If you make a claim within six months after the time the dividend distribution was approved, you must attach documentation for purchases and sales up until the time the claim was made.

  • Confirmation to the Danish Tax Authorities of borrowed or lent position
    The claim must state whether the shares were borrowed from or lent to others at the time when the dividend distribution was approved.

  • Other supporting documentation: Any other documentation which may be requested by SKAT in order for them to determine the eligibility of a beneficial owner for the refund request. The Danish Tax Authorities is reviewing the eligibility of the beneficial owners requesting tax reclaims on a case-by-case basis and consequently further documentation may be requested at any time.

Further details regarding the reclaim documentation requirements can be viewed on the Danish Tax Authorities website.  

Statutory deadline for reclaiming withholding tax

The statutory deadline for reclaiming withholding tax, applicable to reclaims submitted via standard refund procedures, are generally three years after the date on which the dividend was distributed.

Note: Certain countries may have a longer statutory deadline than three years, as stipulated in the relevant Double Taxation Treaty. In such cases, this deadline will still continue apply.

Clearstream deadline for standard refund applications

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 Danish Authorities by the date considered as being the statute of limitations deadline.

When are refunds received?

The estimated time for receiving a standard refund is currently not defined by the Danish Tax Authorities. 

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 standard 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.