Quick refund - eligibility, documentation, deadlines - Portuguese debt securities - securities held in CBF
Who can obtain a quick refund?
Quick refund of withholding tax on interest from Portuguese debt securities is available through Clearstream Banking for eligible beneficial owners (who have not obtained a relief at source), as follows:
Domestic bonds subject to Law 83/2013 clarified by Circular Letter 4/2014
Eligible beneficial owners | Effective rate of tax | Tax |
DTT/TIEA residents eligible for tax exemption | 0% | 35% |
Credit institutions, financial companies, pension funds, insurance companies domiciled in an OECD Member State or in a DTT country | 0% | 35% |
Collective Investment Vehicles (CIVs) domiciled in an OECD Member State or in a DTT country | 0% | 35% |
Central banks, public law agencies, public law entities or International/Supranational organisations recognised by the Republic of Portugal | 0% | 35% |
Portuguese residents eligible for tax exemption | 0% | 35% |
Portuguese beneficial owners not eligible for tax exemption but applying for reduced tax rates | 25% / 28% | 10% / 7% |
a. Expressed as a percentage of the gross interest amount.
Documentation requirements
To apply for a quick refund, customers must provide :
- Form MOD 25-RFI from both resident and non-resident beneficial owners.
- a Master Instruction Portuguese Debt Securities – DL 193/2005 Of November 7 (the MI) for each tax relief account: one-time certificate at the level of the customer’s account. A new MI must be provided if any change occurs that renders the Mi untrue.
and,
depending on the status and residency of each final beneficial owner:
DTT/TIEA residents eligible for tax exemption (or that are not, otherwise, residents in a blacklisted jurisdiction nor within the scope of any of the specific rules below)
- A Certificate of Residence (COR) or an equivalent document issued by the beneficiary’s local tax authorities; or
- A document issued by the local Portuguese Consulate attesting to the beneficiary’s residency abroad (applicable to individuals only); or
- A document issued by any other public authority attesting to the beneficiary’s residence in the country of which they claim to be resident.
The validity of any of above documents is three years.
Central banks, public law entities, public law agencies, or supranationals/international organisations recognised by the Republic of Portugal (or a body of such recognised international/supranational organisation to whom the same immunities and privileges should be availed to).
- A one-time Self-Declaration for Tax Exemption/Reduced rate Beneficial Owner Not Resident in Portugal.
Credit institutions, financial companies, pension funds, and insurance companies domiciled in an OECD Member State or in a DTT country
- One-time official document of tax identification; or
- A one-time declaration issued by the tax authority or by the competent public body in beneficiary’s State of residence responsible for the regulatory supervision of its business attesting that it was validly created under the laws of its State of residence as well as its domicile; or
- A COR or an equivalent document issued by the beneficiary’s local tax authorities or by any official government entity authorised to issue such certification, to be renewed every three years.
Collective Investment Vehicles (CIVs) domiciled in an OECD Member State or in a DTT country
- a one-time Declaration issued by the tax authority or by the competent public body in the beneficiary’s State of residence responsible for the regulatory supervision of its business attesting that it was validly created under the laws of its State of residence, the law governing its formation, as well as its domicile; or
- A COR or an equivalent document issued by the beneficiary’s local tax authorities or by any official Government entity authorised to issue such certification, to be renewed every three years.
Portuguese entities not subject to withholding tax, in accordance with the Portuguese legislation
Portuguese residents applying for reduced withholding tax rate
Form descriptions are presented according to the procedures available for relief and/or reclaim of withholding tax on income from Portuguese debt securities.
Deadlines for receipt of documents
The deadline for reclaiming withholding tax via the quick refund procedure through CBF depends on the fiscal residency and eligibility of the beneficial owner for tax exemption or reduced tax rate, as follows:
Category of beneficial owner | Deadline for receipt by CBF |
For non-residents of Portugal entitled to full quick refund of withholding tax under the application of the SDSR | At the latest five business days before the sixth month after the payment date |
For residents of Portugal entitled to full quick refund of withholding tax under the application of the 2008 State Budget Law | At the latest 10:00 CET on the 13th of the month (or the last business day prior to the 13th, if the latter is not a business day) following the month in which the interest payment was made. |
For residents of Portugal entitled to a reduced rate of withholding tax (25%/28%) | At the latest 10:00 CET on the 13th of the month (or the last business day prior to the 13th, if the latter is not a business day) following the month in which the interest payment was made. |
When are refunds received?
The estimated time for receiving a quick refund is two weeks from the date that Clearstream Banking receives the certified documents.