South Korea: Depositary Receipts - Relief at source – documentation requirements for two new types of BOs under the Overseas Investment Vehicle and Overseas Public Collective Investment Vehicle
Clearstream Banking1 informs customers that effective
1 January 2020
There are two new types of eligible beneficial owners under an overseas investment vehicle (OIV) or an overseas public collective investment vehicle (OPCIV) and below are the detailed documentation required and the three conditions they must fulfil to be eligible for relief at source on depositary receipt dividends subject to South Korean tax.
Background
As advised by our depository, there are two new types of eligible beneficial owners under the OIV and OPCIV:
- OIV and OPCIV classified as a corporation;
- OIV and OPCIV classified as a corporation and considered the beneficial owner under the new tax act.
The three conditions are as follows:
- The OIV or OPCIV should be classified as a corporation;
- The OIV or OPCIV is liable for tax in its resident country;
- The OIV or OPCIV is not established for purposes of tax evasion on domestic source income.
Clearstream Banking does not assist in this regard. Please consult your tax advisor for further information.
Impact on customers
OIVs and OPCIVs classified as a corporation and fulfilling the three conditions above must submit the following documents in order to be qualified for a reduced rate of withholding tax according to their country of residence:
- Report of overseas investment vehicle (Form No.72-5A);
- Certificate of Residence (COR), Form 6166 (must contain the Tax ID);
- Documents evidencing that the OIV or OPCIV is registered as an investment vehicle in its country of residence.
OIVs and OPCIVs classified as a corporation and considered the beneficial owner under the new tax treaty, and fulfilling the three conditions above must submit the following documents in order to be qualified for a reduced rate of withholding tax according to their country of residence:
- Report of overseas investment vehicle (Form No.72-5B);
- Certificate of Residence (COR), Form 6166 (must contain the Tax ID);
- Documents evidencing that the OIV/OPCIV is registered as an investment vehicle to its country of residence.
The forms remain valid for up to three years (from issued date) provided the underlying holders of the OIV or OPCIV do not change during that time.
Further information
For further information, please contact the Clearstream Banking Tax Help Desk or Clearstream Banking Client Services or your 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 AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.