Quick refund - Eligibility, documentation, deadlines - Portuguese equities

10.09.2020

Who can apply for a quick refund?

A quick refund of withholding tax on dividends from Portuguese equities is available through Clearstream Banking for eligible beneficial owners if full or partial relief at source has not been obtained, as follows:

Eligible beneficial owners

Effective rate of tax
after refund

Tax refund
available
a

Residents of a Double Taxation Treaty (DTT) country

Tax treaty rate

35% minus the
tax treaty rateb

Non-residents of Portugal recognised as tax-exempt under Portuguese legislation (including Central banks and government agencies, International/Supranational organisations recognised by Portuguese law)

0%

35%

Portuguese residents eligible for tax exemption

0%

35%

Beneficial owners (resident and non-resident) applying for reduced ratesc

25%/28%

10%/7%

a. Expressed as a percentage of the gross dividend amount.
b. Amount of relief will be 0% if the DTT rate exceeds 35%.
c. Residents of Tax Havens having a DTT in place with Portugal cannot benefit from the reduced 25%/28%.

To apply for partial or total quick refund from withholding tax on dividend payments for equities, the beneficial owners have to fulfil the following reporting and documentation requirements:

Reporting requirements for each quick refund application

All customers applying for quick refund must submit:

  • Position Breakdown Report completed by the customer and including the position held at record date by each beneficial owner reclaiming the tax withheld at source.

Documentation requirements

There are different documentation requirements depending on the status and residency of the beneficial owner.

Residents of Double Taxation Treaty (DTT) countries (including Luxembourg SICAVs):

  • Form Mod. 21-RFI must be provided annually – as of 1 October 2019 the form can no longer be certified in Box III but must be accompanied by a separate Certificate of Residence (COR). On 31 August 2020, the Portuguese Tax Authorities published a new model whereby customers must mark in Box III the attachment of the COR; and
  • Power of Attorney if Mod-21 RFI is not completed by the final beneficial owner.

In addition the following documentation is requested for DTT residents according to their status:

Funds / Trusts:

  • Statement for Funds: Declaration issued by the trust’s/fund’s local authorities certifying that the respective trust or fund is liable to tax in its country of residence and is not transparent for tax purposes. The Declaration must be provided annually.

OR

For U.S. pension funds and Regulated Investment Companies (RIC):

  • A form 6166 confirming that the pension fund or the RIC is liable to tax in U.S.A.; and
  • A Statement for U.S. pension funds and RIC issued by the IRS or self-declaration confirming that the beneficial owner complies with conditions foreseen in Article 17, number 1 c) and e) of the DTT between Portugal and the U.S.A.

OR

For Luxembourg SICAV

  •  A COR stating that the entity is considered as a SICAV for the year of the income. The COR is valid for one (1) year date-to-date, unless otherwise specified on the document

OR

For Swiss pension funds

  • Statement for Swiss pension funds: Declaration issued by the pension fund’s local authorities certifying that the respective entity is 1) a pension fund in which individuals participate to secure old-age, disability and survivors' insurance and 2) the pension fund is established, recognised for tax purposes and controlled under the laws of Switzerland, is liable to tax in its country of residence and is not transparent for tax purposes.
  • Self Declaration of holding period duly completed and signed by the pension fund being the final beneficial owner must be sent in original form for each quick refund application. It must confirm uninterruptedly from when the pension fund has held the Portuguese equities.
    The Declaration must be provided annually, in original form, in addition to the documentation requested for DTT residents (that is, Mod 21-RFI, Power of Attorney, etc.).

Non-residents of Portugal recognised as tax-exempt under Portuguese legislation (including Central banks, government agencies, International/Supranational organisations recognised by Portuguese law)

  • Statement of Beneficial Ownership for Exempt Beneficiaries of Equities Not Resident in Portugal certifying that the entity eligible for tax exemption is effectively the beneficial owner of the income at the recorded date of the relevant dividend payment date.
  • Documentations supporting the right to exemption, that is, a copy of the Portuguese administrative act that proves the eligibility to tax exemption on Portuguese dividends, valid until revoked.

Portuguese residents eligible for tax exemption

  • Statement of Beneficial Ownership for Exempt Beneficiaries of Debt Securities and Equities Resident in Portugal certifying that the entity eligible for tax exemption is effectively the beneficial owner of the income at the recorded date of the relevant dividend payment date.
  • A copy of the fiscal identification card; or
  • A Portuguese COR where the Portuguese fiscal ID number (FIN), the name of the investor and its address are indicated.

Deadline for receipt of documents

Documentation for relief at source of withholding tax on dividends from Portuguese equities must be received by Clearstream Banking at the latest 10:00 CET on the 10th of the month (or the last business day prior to the 10th, if the latter is not a business day) following the month in which the dividend payment was made.

Form descriptions are presented according to the procedures available for relief and/or reclaim of withholding tax on income from Portuguese equities.