Standard refund - eligibility, documentation, deadlines - Italian equities

Who can apply for a standard refund?

A standard refund of withholding tax on dividends from Italian equities is available through Clearstream for beneficial owners who did not obtain relief at source or a quick refund, as follows:

a. Expressed as a percentage of the gross dividend amount.
b. Before 1 January 2012, the rate was 27% and, between 1 January 2012 and 30 June 2014, the rate was 20%.
c. Amount of relief will be 0% if the DTT rate exceeds 26%.
d. 1.375% until 31 December 2016, 1.20% as of 1 January 2017.

Important note:

Clients are reminded that all standard refund applications depend on the final approval of the Italian Tax Authorities.

Furthermore, clients should be aware that the Italian Tax Authorities' requirements and interpretation of the applicable laws may be subject to changes. In order to safeguard the interests of our clients and to avoid rejections of withholding tax reclaims, clients are strongly recommended to certify their accounts for tax exemption at source, or via quick refund, and to avoid the standard refund applications. Clearstream cannot accept responsibility for the acceptance or non-acceptance of tax reclaims by the Italian Tax Authorities.

Documentation requirements

Documentation requirements are the same for all types of eligible beneficial owner, as follows:

• Domanda di Rimborso / Refund Claim;
• Power of Attorney (if the tax forms are not signed by the final beneficial owner);
• Power of Attorney from Final Beneficial Owner to Clearstream;
• Credit Advice;
• Letter of Request to Clearstream for Reclaim of Italian Withholding Tax.

Form descriptions are presented according to the procedures available for relief and/or reclaim of withholding tax on income from Italian equities.

Deadline for receipt of documents

The statutory deadline for reclaiming withholding tax using the standard refund procedure is four years after the dividend payment date.

The deadline by which Clearstream must receive the documentation for an application is at the latest three months before the statutory deadline.

Fees charged for a tax reclaim

In addition to the standard fee charged by Clearstream per reclaim form (as detailed in the Clearstream International Fee Schedule), the fees charged by the local custodian for handling tax refund requests for a client will be passed on by Clearstream to the client. Currently, a fee of EUR 10 is charged per tax refund file.

When are refunds received?

There is no estimated time for receiving a standard refund: it can vary depending on when the application is filed and on the complexity of the information supplied on the reclaim form. However, according to Clearstream’s experience in the market, refunds may be considerably delayed before the budgeted funds become available, possibly up to several years from the date of receipt by the Italian Tax Authorities.

In the event of a delayed tax refund, the Italian Ministry of Finance grants compensation interest on the amounts to be refunded, as explained under General information.

Proactive Tax Reclaim Service for Italian equities

Clearstream offers a proactive service for completing applications for refunds of Italian withholding tax on dividend payments by means of reclaim form Domanda di Rimborso. The improvements of this service are as follows:

• Clearstream will provide additional assistance to clients in completing the tax reclaim form.
• The time between the initial request for the service and the submission of the refund package by Clearstream to the Italian Tax Authorities is reduced.

Description of the process

The clients initiates the process by sending a message via an authenticated means of communication or an original letter to the following address:

Clearstream Operations Prague s.r.o.
Attn: OTR - Tax Reclaim Services
Futurama Business Park Building B
Sokolovska 662/136b
18600 Prague 8
Czech Republic

with the following information for each reclaim application (for which a separate Domanda di Rimborso must be completed):

• The client’s account number with Clearstream;
• For individual beneficial owners:
  • Name, date and place of birth;
  • Full address;
  • Local Tax Identification Number (TIN).
• For legal entity beneficial owners:
  • Name and full address (registered seat);
  • Local Tax Identification Number (TIN).
• For legal representatives:
  • Name, date and place of birth;
  • Full address;
  • Local Tax Identification Number (TIN).
• The name, contact details and address of the person in the client's organisation to whom the Domanda di Rimborso should be returned.

and, for each event for which a refund is being reclaimed:

• The ISIN code, the common code or the ABI code;
• The fiscal year and the dividend value date for the reclaim application;
• Nominal value of the security on which the reclaim is based;
• The tax rate required to be applied as per the Double Taxation Treaty or Italian legislation (treaty rate, 11%, 1.375%, 0%).

Completion of original certificates

Upon receipt of the above information, Clearstream produces the Domanda di Rimborso and sends it to the client for checking and confirmation that all details are correct.

The form is addressed to the attention of the person identified in the original client request.

Client agreement

The Domanda di Rimborso is sent to the client to obtain agreement on the details included in the form and to have it signed by all relevant parties.

Upon receipt of the form, the client does the following:

• Have it signed by the final beneficial owner. Where the client is also the final beneficial owner, the client should sign it as the beneficial owner. If the final beneficial owner is a legal entity, the stamp of the company must be next to the signature. Electronic signatures are not accepted.
• Ensure that the beneficial owner submits the Domanda di Rimborso to its local tax authorities in order to have the section “Attestation of the Local Tax Authorities” signed and stamped to certify the beneficial owner's country of residence. The beneficial owner then returns the completed form to the client.
• Upon receiving it back from the beneficial owner, the client must check all the data, fill in the full name and address, and stamp and sign the “Banker’s Affidavit" section.
• Return the completed Domanda di Rimborso, duly signed, to Clearstream's Tax Services Department together with the following documents:
  • If the final beneficial owner is a physical person, a copy of his Identification Card or Passport;
  • If the final beneficial owner is a legal entity, the legal representative’s Identification Card or Passport;
  • The Power of Attorney from the Final Beneficial Owner to Clearstream;
  • The Credit Advice from each intermediary;
  • If the Domanda di Rimborso it is not signed by the final beneficial owner, the Power of Attorney from the final beneficial owner to the entity signing the tax form.

Note: Clients must warrant the completeness and accuracy of the information they supply to Clearstream. Clearstream is under no obligation to carry out any investigation in respect of such information.

Submission of the reclaim

Upon receipt of the Domanda di Rimborso, Clearstream does the following:

• Verify that the form fulfils all the necessary requirements;
• Send it to the Italian Tax Authorities;
• Retain a copy for its records.

After the Italian Tax Authorities have paid the amount reclaimed to the depository, the refund is credited to the Clearstream account specified in the client's original request.

Fee structure

The fee for the Proactive Tax Reclaim Service is EUR 100 for the production of each Domanda di Rimborso.