Relief at source - eligibility, documentation, deadlines – U.S. debt securities
Reference
Who can obtain relief at source?
Tax relief at source on interests from U.S. debt securities is available through Clearstream, provided that:
- Clearstream’s direct client is the final beneficial owner and a FATCA compliant non-U.S. recipient1
- Clearstream’s direct client is a U.S. exempt person, or
- Clearstream’s direct client is a Qualified Intermediary (QI) that assumes primary nonresident alien (NRA) withholding responsibility and Form 1099 and back-up withholding responsibility (QIA), or
- Clearstream’s direct client is a QI that assumes primary NRA withholding responsibility but does not assume Form 1099 and back-up withholding responsibility (QIB), or
- Clearstream’s direct client
- is a QI that does not assume primary NRA withholding responsibility, but that assumes Form 1099 and back-up withholding responsibility (QID) and
- holds the U.S. source securities on behalf of FATCA compliant recipient being non-U.S. beneficial owners1 and/or US persons, or
- Clearstream’s direct client
- is a QI that does not assume primary NRA withholding responsibility nor Form 1099 and back-up withholding responsibility (QIC) and
- holds the securities on behalf of FATCA compliant recipient being non-U.S. beneficial owners8 and/or US exempt persons and/or US specified persons in a payee pool and/or US specified persons for which a 1099 reporting is required, or
- Clearstream’s direct client
- is a FATCA compliant Non-Qualified Intermediary (NQI) and
- holds the securities (either directly or indirectly via a an additional FACTA compliant NQI intermediary) on behalf of recipients that are FATCA compliant final beneficial owners8 and/or FATCA compliant QIs and/or US exempt recipient and/or US specified persons in a payee pool and/or US specified persons for which a 1099 reporting is required
Documentation requirements
In order to benefit from tax relief at source on interests from U.S. debt securities, clients must ensure to provide Clearstream with the following documents within the applicable deadlines. The related templates of the forms are available on our Tax forms to use section.
For all clients applying for tax relief at source on interests from U.S. debt securities:
- An IRS form (W-8IMY, W-8BEN-E, W-8EXP, W-8ECI, W-9 – as applicable), in the name of the Clearstream client,
- A One-time certificate (OTC), in the name of the Clearstream client.
Clearstream clients may use the Decision table (see attached below) in order to identify which template of OTC needs to be provided, depending on their status and needs. Should Clearstream client not find any OTC matching their requirements, a specific request needs to be raised to our Tax Helpdesk.
In addition, for Clearstream clients that are foreign intermediaries, the below additional documentation may have to be provided, depending on the Chapter 3 status of Clearstream client and the account structure selected in the OTC. Such additional documentation is fully described in the relevant OTC and may consist in:
- An IRS form (W-8BEN-E, W-8EXP, W-8ECI, W-8BEN, W-9 – as applicable) in the name of the FATCA compliant non-U.S. beneficial owner(s) or U.S. exempt recipient or U.S. specified person
- A per payment instruction, fulfilling formatting requirements described under the section “Form description”.
Important note: Clearstream’s clients that act as NQI and wish to hold on the same account US taxable securities on behalf of multiple underlying recipients should contact their Relationship Manager for approval.
Validity of the documents
Certificate | Validity |
One-time certificate | Valid until revoked, unless there is a change in circumstances |
IRS form W-9 | Valid until revoked, unless there is a change in circumstances |
IRS form W-8IMY in the name of Clearstream clients acting as QI | Valid until revoked, unless there is a change in circumstances |
IRS form W-8IMY in the name of Clearstream clients acting as NQI | Valid from the date the form is signed until the last day of the third succeeding calendar year, unless there is a change in circumstances |
IRS form W-8BEN or W-8BENE |
|
W-8EXP | Valid until revoked or from the date the form is signed until the last day of the third succeeding calendar year (unless there is a change in circumstances), depending on the options selected in the form and in accordance with IRS instructions. |
IRS form W-8ECI | Valid from the date the form is signed until the last day of the third succeeding calendar year, unless there is a change in circumstances |
Important note: The validity periods described in the above table only aim at providing a general overview of the main expiration dates that may apply, but do not include any specific validity period (depending for instances on the status chosen on the IRS form) that may apply according to U.S. Internal Revenue Code.
Deadlines for receipt of documents
- Tax certificates (OTC and IRS forms) should be received by Clearstream the latest 10 business days before the relevant interest payment date, 10:00 CET.
- Tax instructions should be received by Clearstream the latest 2 business days before the relevant interest payment date, 10:00 CET.
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1. Should the debt security not qualify for the ‘portfolio interest exemption’ (as defined in US Internal Revenue Code), the non-U.S. beneficial owner must also be resident in a country that has signed a DTT with the U.S.A.
