New Zealand: Bonds and equities – changes in quick and standard refunds process
Clearstream Banking1 informs clients that effective
immediately
the current quick and standard refunds process for New Zealand bonds and equities has been amended.
Background
Currently, quick and standard refunds for bonds and equities are available through Clearstream Banking for eligible beneficial owners.
Recently, Clearstream Banking’s local depository has conducted a review of the New Zealand taxation regime with the New Zealand Inland Revenue Department (IRD). Following clarification from the IRD, the local depository has confirmed that the market interpretation of the quick and standard refunds process has changed.
Impact on clients
In accordance with the latest market guidance, the following applies with regard to the refund process:
Eligibility of securities
New Zealand bonds under the Approved Issuer Levy (AIL) regime
- Quick and standard refunds for New Zealand bonds under the AIL regime are not available anymore. The reason is that under New Zealand tax legislation, there are no mechanisms available to allow investors to retrospectively apply for the AIL.
New Zealand bonds under the Non-Resident Withholding Tax (NRWT) regime
- Quick and standard refunds for New Zealand bonds under the NRWT regime are available on a case-by-case and “best efforts” basis as no market practice is applicable.
New Zealand equities
- Quick and standard refunds for New Zealand equities are available on a case-by-case and “best efforts” basis as no market practice is applicable.
Procedure for a quick refund
Clients wishing to submit via Clearstream Banking a quick refund request for New Zealand bonds under the NRWT regime or for New Zealand equities must submit the request via Swift or Xact Web Portal.
- Breakdown of holdings with request for quick refund.
Upon receipt of the request, Clearstream Banking will investigate the following details with its local depository:
- Availability of quick refund for the particular event;
- Certification requirements for the particular beneficial owner.
Procedure for a standard refund
Clients wishing to submit a standard refund request for New Zealand bonds under the NRWT regime or for New Zealand equities via Clearstream Banking should send an original version of the “Letter of request to Clearstream Banking for reclaim of withholding tax on New Zealand Securities” (attached below) duly completed and signed to Clearstream Banking.
Upon receipt of the request, Clearstream Banking will investigate the following details with its local depository:
- Availability of standard refund for the particular event;
- Certification requirements for the particular beneficial owner.
Note: Quick and standard refunds are not available for New Zealand residents.
Deadlines for receipt of documents
Documentation for a quick refund of withholding tax on income from New Zealand securities must be received by Clearstream Banking at the latest ten business days before the end of the financial year by 10:00 CET (NZ financial year is 1 April to 31 March).
The statutory deadline for reclaiming withholding tax using the standard refund procedure is four years after the end of the financial year (1 April to 31 March) in which the income payment was made. Documentation for a standard refund of withholding tax on income from New Zealand securities must be received by Clearstream Banking at the latest two months before the statutory deadline.
Further information
The Market Taxation Guide – New Zealand will be updated in due course.
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 clients 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.