Icelandic tax-exempt debt securities - relief at source - rates, eligibility, documentation, deadlines etc.

Withholding tax

The standard rate of withholding tax on interest and redemption payments from non-taxable Icelandic debt securities, is the 0% non-resident rate in Clearstream.

Eligible beneficial owners/recipients

a. Clients that are Icelandic Banks complying with Article 3.2 of Act no. 94/1996 will automatically receive income payment with 0% non-resident withholding tax. Certification is therefore requested from such clients for reporting purposes to ensure such entities are reported as Icelandic recipients instead of non-residents.

Relief at source

Documentation requirements

Clients are requested to provide the following documentation depending on their own residency and the residence of the underlying beneficial owners.

• Clearstream clients that are non-residents and holding for non-resident beneficial owners

No action is required by the Clearstream clients, as Clearstream applies by default the 0% non-resident withholding tax rate on interest and redemption payments from the above-mentioned debt securities.

• Clearstream clients that are Icelandic Banks complying with Article 3.2 of Act no. 94/1996
  • A OneTime Certificate for Icelandic Banks complying with Article 3.2 of Act no. 94/1996, which is valid until revoked.

Note: Such entities are considered as Icelandic tax withholding agents, implying that they must withhold the appropriate tax amounts from their respective clients, and report these amounts to the Icelandic Tax Authorities.

Deadlines for receipt of the required documentation by Clearstream

Interest and redemption payments

Important note

Clearstream reminds clients that, in the absence of any certification from clients that are Icelandic banks, Clearstream will report to the RSK interest and redemption payments as being paid to non-resident clients holding for non-resident beneficial owners only.

Clients are also reminded that it is at all times the client's full responsibility to ensure that final beneficial owners are eligible for the tax rates applied (including the Clearstream default rates), and that all information provided by clients for tax purposes is complete, accurate and up to date. Furthermore, clients shall hold Clearstream harmless of any loss or liability incurred by Clearstream as a result of a breach of this responsibility.

Capital gains tax

There is no capital gains tax withheld through Clearstream on non-taxable debt securities held in Clearstream. Capital gains tax may however be payable on specific gains. Clearstream does not assist in this regard. Please consult your tax advisor for further information.

Disclosure requirements

To comply with Icelandic disclosure and reporting requirements, Clearstream is requested to provide:

• on a monthly basis, the name and transaction details of the Clearstream client to the Icelandic tax authorities (RSK); and
• upon request, disclosure of the positions of the ultimate beneficial owners on a specified date in a given security to the tax or any other relevant authorities in Iceland.

Clients are kindly requested to refer to the CBL Disclosure Requirements - Iceland for full details of the disclosure requirements.