U.S.A.: Reminder about backup withholding tax

Clearstream Banking¹ reminds customers that refund of backup withholding tax is not available through Clearstream Banking.

Background

Clearstream Banking, acting as U.S. Qualified Intermediary, assumes primary Non-Resident Alien withholding responsibility and primary Form 1099 reporting and backup withholding responsibility.

Accordingly, customers that have certified to Clearstream Banking (via a Form W-8IMY and a One-Time Certificate) that they were holding U.S. taxable securities on behalf of U.S. specified person(s) for which a payee specific 1099 reporting is required must provide Clearstream Banking with:

a Form W-9 duly completed and signed by each U.S. specified person; and
a per payment breakdown if applicable (that is, omnibus account structure).

Should the customer not fulfil one of the above requirements the latest 10:00 Central European Time two business days prior any U.S. taxable income payment date, such income payment (or portion of payment) will be subject to a backup withholding tax rate of 24%.

Clearstream Banking must pay any backup tax withheld on a regular basis to the IRS, therefore Clearstream Banking will not accept any tax refund request from customers.

Impact on customers

The above impacted customers are reminded to provide complete tax certification and tax instruction (if applicable) before the relevant Clearstream Banking deadline in order to receive U.S. taxable income gross at source.

Any backup withholding tax reclaim will be rejected by Clearstream Banking.

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.