Canadian equities - Quick refund - eligibility, documentation, deadlines (CEU)

Eligible beneficial owners

Beneficial owners are eligible for a quick refund of withholding tax on income from Canadian equities as follows:

a. Partnerships (NR302) and Hybrid Entities (NR303) are not considered eligible and must submit any reclaim applications via the standard refund procedure.

Residents of a DTT country - non-resident according to Form NR301 (General)

Quick refund is available for beneficial owners who qualify for the benefit of a reduced rate of withholding tax in accordance with a DTT between their country of residence and Canada and who qualify as non-residents according to Form NR301. The maximum rate of withholding tax is defined in the relevant DTT.

Tax-exempt entities

Quick refund is available for beneficial owners who are recognised as tax-exempt by the Canada Revenue Agency.

In both cases, if the eligible beneficial owner has not obtained relief at source or applied for a quick refund, a reclaim of the relevant amount of withholding tax is available through Clearstream Europe, via standard refund, by submitting the appropriate documentation.

Important note:

Clients acting as Swiss intermediary for final beneficial owners of Canadian equities can also apply for a quick refund via Clearstream Europe.

Documentation requirements

For a quick refund of withholding tax on income from Canadian equities, the documentation requirements vary according to the type of eligible beneficial owner, as follows:

For Residents of a DTT country who qualify as non-resident according to Form NR301:

• One-Time Certificate – Canadian Equities and Trust Instruments;
• Per-Payment instruction;
• CRA Form NR301, as follows:
  • For clients holding proprietary assets: An original Form NR301, signed by the client as final beneficial owner qualifying for DTT relief according to Form NR301, must be submitted to Clearstream Europe directly.
  • For clients acting as intermediary: An original Form NR301, signed by the final beneficial owner qualifying for DTT relief according to Form NR301, must be submitted to and retained by the client, who must provide it promptly to Clearstream Europe upon request at any time.
    
    The client must exercise due diligence with respect to the information provided on this form and must verify whether the information is sufficient to claim DTT relief on behalf of the final beneficial owner.

and, in addition, for pension plans that are exempt by virtue of a DTT:

• A letter from the pension plan declaring that it is operated exclusively to provide pension or retirement benefits and that it qualifies for exemption on dividend income under the specified article of the relevant country treaty with Canada; and
• A letter from the local tax authority confirming the tax status of the pension or retirement plan.

and, upon request:

• List of Beneficial Owners – Canadian Securities;
• CRA Form NR301 (from clients acting as intermediary);
• Certificate of Residence;
• Any other tax documentation as required from time to time.

For Tax-exempt entities:

• One-Time Certificate – Canadian Equities and Trust Instruments;
• Per-Payment instruction;
• A Withholding Tax Exemption Letter issued by the CRA (including the “tax-exempt registration number").

Swiss Intermediary banks:

• One-Time Certificate – Canadian Equities and Trust Instruments - Swiss Intermediary;
• Per-Payment instruction.

Deadline for receipt of documents

The deadline for the receipt of required documentation in support of a reclaim of withholding tax on Canadian Securities using the quick refund procedure through Clearstream Europe will be communicated to clients via announcements, on an annual basis, at the year end. Clients must therefore refer to the annual announcement in order to have the applicable deadlines.

The usual deadlines are however as defined below:

Positions for which clients have not submitted the requested documentation before the prescribed deadline will be taxed, through Clearstream Europe, at the maximum applicable rate.