Czech Republic: Shorter statutory deadline for specific issuers for standard refunds

The statutory deadline for a standard refund may be reduced from three years after the end of the calendar year in which the payment was made to three years after the end of the calendar month in which the payment was made, depending on the issuer collecting the tax from the underlying investors and paying it to the Czech Tax Office.

Background

Clearstream Banking¹ has been recently informed by its local depository that for dividends paid for ISIN CZ0005112300 (issuer ČEZ) on 1 August 2013 the deadline to reclaim the tax over withheld at source has been reduced to three years after the end of the calendar month in which the payment was made. Clearstream Banking received the following clarification:

In the Czech Republic, the refund applications must be filed by the final beneficial owner through the respective issuer, regardless if the application is done via the quick refund or the standard refund. For a standard refund, the issuer can consider the provisions of §148 of the Czech Tax Code and apply a statutory deadline of three years after the month when the payment took place.

The issuer ČEZ decided to apply a stricter interpretation of the Tax Code provisions, which represents a deviation from standard market procedures, but remains compliant with the local legislation.

This approach creates a precedent in the market and there is no guarantee that other issuers will follow it in the future. If a similar situation occurs, we will inform customers accordingly.

Impact on customers

Customers wanting to reclaim the tax withheld at source on behalf of final beneficial owners must file their application for standard refund at the latest by Wednesday, 20 July 2016.

If this deadline is missed, there is no further possibility of a standard refund.

Further information

For further information, please contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services or your Relationship Officer.

------------------------------
1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500, and Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248.