Japanese listed ETFs and REITs - rates, eligibility, availability of relief etc. – CFCL (Vestima)

Withholding Tax

The standard rate of withholding tax on dividends from Japanese listed Vestima fund securities, Exchange Traded Funds (ETFs) and Real Estate Investment Trusts (REITs) is 15.315% in Clearstream Fund Centre.

Important note:

Residents of Japan are subject to withholding tax on dividends from Japanese listed ETFs and REITs as follows:

• Individuals are subject to 20.315% (15.315% national tax + 5% local tax).
• Corporations are subject to 15.315%.

It is the responsibility of the client to ensure that final beneficial owners are eligible for the tax rates applied for, including the Clearstream Fund Centre default rate. Neither Clearstream Fund Centre nor its local depository has any direct or indirect liability towards the Japanese Tax authorities in this regard (please refer to documentation requirements below for Japanese residents).

Availability of relief

The following types of beneficial owners can, provided that the appropriate documentation is submitted to Clearstream Fund Centre, obtain relief at source from withholding tax on dividends from Japanese listed ETFs and REITs:

• Residents of Double Taxation Treaty (DTT) countries; and
• Tax-exempt entities (such as International or Supranational organisations).

N.B.: Residents of DTT countries include tax-exempt eligible beneficial owners under a double tax treaty that has a limitation on benefits (LOB) clause as determined by the minister of finance. In order to be tax-exempt eligible under a double tax treaty that has an LOB clause, the beneficial owner has to be qualified for Treaty Benefits when looking at the criteria specified in the limitation on benefits article. Clearstream Fund Centre does not assist in this regard. Please consult your tax advisor for further information.

Note: For certain types of beneficial owners who are residents in a DTT country, the reduced tax rate or exemption may not be applicable to Japanese REITS. Clearstream Fund Centre does not assist in this regard. Please consult your tax advisor for further information.

A standard refund of withholding tax on dividends from Japanese listed ETFs and REITs is available through Clearstream Fund Centre for eligible beneficial owners that did not obtain relief at source.