General information - types of Vestima fund securities, deadlines, other market specifics - Australia - CFCL

Types of Vestima fund securities eligible in Clearstream Fund Centre

The eligible Vestima fund securities issued in Australia are as follows:

• Equity-related instruments (ETFs):

Under Australian tax legislation, several types of tax credits can be attached to a dividend payment, according to the franked/unfranked status of all or part of the dividend. Such tax credits can result in a reduction of the actual withholding tax.

• Managed Investment Trusts (MITs):

Unit trusts generally return profits or excess income to unit holders in the form of distributions, which may consist of different components that make up a total distribution payment.

Legal background

Managed Investment Trusts (MITs):

Managed Investment Trust (MIT) distributions may consist of various components, which are treated according to the following legislation:

• Income Tax Assessment Act 1936 (unfranked dividends and interest components).

This legislation provision enforces transparency of the underlying beneficial owner and Australian custodians can make tax adjustments on dividend and interest payments according to the tax status of the final beneficial owner.

• Taxation Administration Act 1953 - Section 12 (other distribution components such as fund payments).

Section 12 has no provision that enforces transparency of the underlying beneficial owner and Australian custodians cannot make adjustments but are obliged to apply the tax status of the "first tier beneficiary" or account held directly with the Australian custodian (that is, Clearstream Fund Centre for the various components.

Types of beneficial owner

The types of eligible beneficial owner recognised for tax purposes in Australia vary according to security type, as follows:

• Non-residents of Australia;
• Tax-exempt beneficial owners;
• Residents of a DTT country;
• Residents of an EOI country;
• Residents of Australia.

Statutory deadline for reclaiming withholding tax

The statutory deadline for reclaiming withholding tax is six years after the relevant income event payment date.

In practice and according to Clearstream Fund Centre’s local depository, the Australian Tax Office (ATO) will accept any reclaim for withholding tax up to four years after the relevant income event payment date.

Thereafter, reclaims of up to six years from the date of remittance will be considered for assessment. Consequently, a refund application submitted to the ATO between four and six years after the relevant payment date must be for a substantial amount and/or show good reason as to why it was not submitted earlier. Any reclaim for withholding tax paid more than six years ago will not be considered for assessment by the ATO.

Clearstream Fund Centre deadline for standard refund applications

The deadline by which Clearstream Fund Centre must receive the documentation for a standard refund application is, at the latest, two months prior to the statutory deadline. All standard refund applications received after this deadline will be processed by Clearstream Fund Centre on a "best efforts" basis. However, in such cases, Clearstream Fund Centre will apply an extra charge and accepts no responsibility for forms that have not reached the ATO by the date considered as being the statute of limitations deadline.

When are refunds received?

The estimated time for receiving a standard refund is 45 days from the date on which The Australian Tax Office (ATO) receives the reclaim application, although this can vary depending on when the application is filed and on the complexity of the information supplied on the reclaim form.

Notes on tax reclaims

Clients warrant the completeness and accuracy of the information they supply to Clearstream Fund Centre.

It is the client's responsibility to determine any entitlement to a refund of tax withheld, to complete the required forms correctly and to calculate the amount due. Clearstream Fund Centre is under no obligation to carry out any investigation in respect of such information.

With respect to tax reclaims in general, clients are reminded that Clearstream Fund Centre accepts no responsibility for their acceptance or non-acceptance by the tax authorities of the respective country.

Exchange of Information (EOI) countries

As at 1 January 2022, the following countries are classified as "exchange of information" (EOI) countries under Regulation 44E of the Taxation Administration Amendment Regulations 2008 (No.2):

Albania, Andorra, Argentina, Armenia¹, Austria, Azerbaijan, Bahrain, Barbados, Bermuda, Brazil, Bulgaria, Brunei, Cabo Verde (a), Cameroon, Canada, Chile, China, Colombia, Cook Islands, Costa Rica, Croatia, Curaçao, Cyprus, Czech Republic, Denmark, Dominica, Estonia, Faroe Islands, Fiji, Finland, France, Georgia, Germany, Ghana, Greece, Greenland, Grenada, Guatemala, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Kazakhstan, Kenya (a),Kiribati, Latvia, Lebanon, Liberia, Liechtenstein, Lithuania, Luxembourg, Marshall Islands, Macao, Malta, Mauritius, Mexico, Moldova, Mongolia (a), Montenegro (a), Montserrat, Nauru, Netherlands, Netherlands Antilles, New Zealand, Nigeria, Niue, Norway, Oman (a), Pakistan, Panama, Papua New Guinea, Peru, Philippines,Poland,Portugal, Qatar, Romania,Russia,Samoa, Saudi Arabia, Senegal, Seychelles, Sint Maarten, Slovakia, Slovenia, South Africa, South Korea, Spain, Sri Lanka, St Lucia, Sweden, Switzerland, Taiwan, Thailand, Tunisia, Turkey, Uganda, Ukraine, United Arab Emirates (UAE), United Kingdom, Uruguay, U.S.A., Vanuatu, Vietnam.

Fund payment tax rates for recipients in EOI countries

When a Managed Investment Trust (MIT) in Australia makes a payment to a foreign investor, the tax rate depends on two main factors:

1. Where the investor is based (whether their country has an information-sharing agreement with Australia—called an “EOI country”).
2. What kind of income the payment includes.
   Standard Tax Rates

• EOI Countries: If the investor is in an EOI country (like Luxembourg), the tax rate is 15%.
• Non-EOI Countries: If the investor is in a non-EOI country, the tax rate is 30%.

Exception: Non-Concessional MIT Income (NCMI)

NCMI is a special category of income that includes:

• Stapled structures (e.g., infrastructure assets)
• Trading trusts
• Residential housing
• Agricultural land

These types of income are considered more “active” business income and do not qualify for the usual 15% tax break. Instead, NCMI is always taxed at 30%, regardless of whether the investor is in an EOI or non-EOI country.

Practical Implications

• If a fund payment includes NCMI, withholding at 30% applies, even if the recipient is in an EOI country.
• Relief at source or reclaim through Clearstream Fund Centre is not available for NCMI.

Summary Table

Important Note:

The non-concessional MIT income (NCMI) component is taxed at 30% irrespective of whether it is an EOI or non-EOI country.

Countries defined as tax havens

a. Including Jersey, Guernsey, Alderney, Sark, Herm.

----------------------------------------------------

1. Withholding tax rates will be reduced from 30% to 15% for certain fund payments made to a recipient with an address in, or to a plac-e located in, one of these countries.