Iceland: Activity resolution – Phase II – Equities and taxable bonds
8 February 2021
reactivation of the activity initiated in June 2020 for non-taxable bonds will now be extended to equities and taxable bonds.
On 6 May 2020, the Icelandic government’s proposal to amend the Withholding Tax Act no. 45/1987 was approved by the Icelandic parliament, enabling Clearstream Banking to resume its activity in Iceland.
Impact on customers
Icelandic equities and taxable bonds eligible in Nasdaq CSD are qualified for settlement in Clearstream Banking, as per market deadlines and format requirements described in the Market Link Guide - Iceland.
By taxable bonds, reference is made to all debt securities that are not listed on the ISIN exemption page of the RSK website and that do not fall under the scope of the Income Tax Act and amendments foreseen under Article 1 of Act no. 39/2013, Article 1 of Act no. 53/2014 and Article 1 of Act no. 107/2015 in particular.
In addition, and in order to fulfil market adopted changes in tax regulations, Clearstream Banking is adapting its tax and reporting processes. As a result, and in line with its new reporting obligations, the following changes apply to Clearstream Banking customers holding Icelandic assets in their accounts.
Icelandic equities and taxable debt securities held on Clearstream Banking’s account at LuxCSD S.A.2 (via Nasdaq CSD), may only be held by the following:
- Non-resident beneficial owners; and
- Clearstream Banking customers that are Icelandic intermediary banks complying with Article 3.2 of Act no. 94/1996 on Withholding of Tax on Financial Income; or
- Icelandic resident beneficial owners, if held via a Clearstream Banking customer, that is an Icelandic intermediary bank complying with Article 3.2 of Act no. 94/1996.
Positions that are held on behalf of Icelandic beneficial owners, may not be held via Clearstream Banking in any other cases.
Tax requirements applicable to equities and taxable bonds
A new tax procedure entered into force on 6 May 2020. Customers of Clearstream Banking willing to enter activity in Icelandic equities or taxable bonds are required to comply with the new procedure and the new disclosure requirements in particular. For a detailed description of the applicable tax procedure, Clearstream Banking invites its customers to refer to Announcements A21016 and A21017.
Clearstream Banking invites customers to take note of the new tax requirements applicable and seek advice from their own tax advisor to ensure they are fully aware of their responsibilities and liabilities towards the Icelandic Tax Authorities (Skatturinn - or formerly RSK) or other authorities as applicable.
The Market Link Guide - Iceland will be amended accordingly.
For further information, customers may contact Clearstream Banking Client Services or their Relationship Officer.
1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.
2. LuxCSD refers to LuxCSD S.A., registered office at 42, Avenue J.F. Kennedy, L-1855 Luxembourg, registered with the Luxembourg Trade and Companies Register under number B-154.449.