Standard refund - Eligibility, documentation, deadlines - Portuguese equities
On 31 August the Portuguese Tax Authorities published a new model whereby customers must mark in box IV the attachment of the CORWho can apply for a standard refund?
A partial standard refund of withholding tax on dividends from Portuguese equities is available through Clearstream Banking for beneficial owners who are residents of a DTT country and did not obtain the treaty rate at source or via the quick refund (the “treaty standard refund”), as follows:
Eligible beneficial owners
Effective rate of tax after refund
Residents of Double Taxation Treaty (DTT) countries
Tax treaty rate
|Beneficial owners (resident and non-resident) applying for reduced ratesc|
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%.
Customers are reminded that full standard refund is not available through Clearstream Banking.
Customers are strongly encouraged to use the relief at source or quick refund procedures. Furthermore, we remind customers that standard refund applications depend on the final approval of the Portuguese Tax Authorities and that Clearstream Banking accepts no responsibility for their acceptance or non-acceptance by the respective authorities.
To apply for the treaty standard 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 treaty standard refund application
In order to increase the chances of obtaining a treaty standard refund from withholding tax on dividends, the registration of the names and securities balances of final beneficial owners that help Portuguese securities in the books of the Portuguese custodian of Clearstream Banking is mandatory.
Clearstream Banking will assist customers with the registration of the final beneficial owners in the books of its Portuguese custodian, but accepts no responsibility for the acceptance or non-acceptance by the tax authorities of the refund application nor for the reimbursement of taxes paid. Customers warrant the completeness and accuracy of the information they supply to Clearstream Banking.
All customers applying for treaty standard refund must submit:
- Position Breakdown Report completed by the customer and including the position held at recorded date by each beneficial owner reclaiming the tax withheld at source;
- Portuguese Tax Identification Number (TIN) Request for each beneficial owner applying for treaty standard refund and not already having a Portuguese TIN;
- Individualised Securities Registration Report (ISRR) completed by the customer once a year and including all transactions (that are domestic, internal Clearstream Banking or Bridge transactions) that took place during the year of the dividend payment.
Deadlines for receipt of documents for reporting purposes
Documentation requested for reporting purposes must be received by Clearstream Banking by the following deadlines:
Type of document
Deadline for receipt by
Position Breakdown Report
With each standard refund application.
Portuguese Tax Identification Number (TIN) Request
With the first standard refund application (if not already provided).
Individualised Securities Registration Report (ISRR)
At the latest 10 business days before the end of the third month following the year in which the Portuguese securities were purchased and / or in which the dividend payment took place, by 10:00 CET.
Documentation requirements for treaty standard refund application
To apply for a treaty standard refund of withholding tax on dividends from Portuguese equities, the following documentation must be submitted to Clearstream Banking for beneficial owners that are residents of Double Taxation Treaty (DTT) countries (including Luxembourg SICAVs):
- Form Mod. 22-RFI must be provided per refund application – as of 1 October 2019, the form can no longer be certified in Box IV but must be accompanied by a separate Certificate of Residence (COR). On 31 August the Portuguese Tax Authorities published a new model whereby customers must mark in Box IV the attachment of the COR; and
- Power of Attorney if Mod-22 RFI is not completed by the final beneficial owner; and
- Letter of Request for Reclaim to Clearstream Banking.
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 in addition to the documentation requested for DTT residents (that is, Mod 22-RFI, Power of Attorney, etc.).
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.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.).
Deadline for receipt of treaty standard refund documents
The statutory deadline for reclaiming withholding tax using the treaty standard refund procedure is two years following the end of the year in which the dividend payment took place.
The deadline by which Clearstream Banking must receive the documentation for an application is at the latest two (2) months before the statutory deadline. All standard refund applications received after this deadline will be processed by Clearstream Banking on a best-effort basis. However, in such cases, Clearstream Banking will apply an extra charge and accepts no responsibility for forms that have not reached the Portuguese Authorities by the date considered as being the statute of limitations deadline.
When are refunds received?
There is no estimated time for receiving a refund via the treaty standard refund application and customers are strongly encouraged to use the relief at source or quick refund procedures.