Reference
Effective
immediately
our depository BNP Paribas Securities Services (BNP) will reject any treaty benefit application for Irish Investment funds not providing a tax attestation confirming that they are taxable on their worldwide income
Background
The Double Taxation Treaty (DTT) in force between France and Ireland does not provide specific provisions with respect to French-sourced dividends paid to Irish Investment funds.
According to the DTT, the treaty benefits apply to a Resident of Ireland which is defined under Article 2 paragraph 7 as “any person who is resident of Ireland for the purposes of Irish tax and who is not a resident of France for the purposes of French tax”.
According to the French usual analysis of the concept of fiscal residency, an entity is considered as a resident of a State if it is subject to tax in that State (without exemption) on its worldwide income, including French-sourced income.
The French Tax Authorities (FTA) have recently sent rejection letters to Irish Investment Funds who had filed treaty benefit applications without providing the proof that they were taxable on their entire income, preventing the FTA from establishing the fiscal residency of the Irish Investment Funds.
Impact on customers
In order to benefit from reduced tax treaty rates on French-sourced dividends, Irish Investment Funds must provide together with their tax forms 5000 and 5001, a specific tax attestation issued by the Irish Tax Authorities confirming that the Fund is effectively paying tax in Ireland on its worldwide income, including French Income.
Customers are also reminded that such a tax attestation has been requested by Clearstream Banking since April 2013 (A13062) and through the annual reminder to renew forms 5000. It has to be provided by all types of Funds wishing to obtain tax treaty rates and by entities not providing sufficient information enabling to identify their status and therefore the taxability.
More recently, our announcement A17002, dated 5 January 2017, aimed to clarify the wording accepted by the FTA.
Failing to provide this attestation will result in an automatic rejection of the treaty benefits application.
Further information
Customers may contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services or their Relationship Officer.
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1. Clearstream Banking refers collectively to 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, and Clearstream Banking AG (for Clearstream Banking Frankfurt (CBF) customers using CreationOnline), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.