Italy: Impact of Brexit on dividend withholding tax procedures applicable to UK residents


Further to TaxFlash T20017 Clearstream Banking1 confirms that effective

1 January 2021

UK residents can no longer benefit from EU/EEA resident tax benefits.


On 25 March 2019, the Italian government approved a transitional period post “no-deal” Brexit allowing UK residents to continue applying to obtain the reduced tax rates on dividends from Italian equities, as granted by the Italian domestic legislation for EU residents being corporations or pension funds.

This transitional period ended on 31 December 2020. As a consequence, UK corporations or pension funds can no longer benefit from the reduced tax rates on dividends, respectively 1.2% and 11% as of 1 January 2021. Those entities can however continue to request the double taxation treaty (DTT) rates.

Impact on customers

As of 1 January 2021, UK corporation or pension funds are no longer eligible to apply for the reduced rates available to EU/EEA residents.

There is a possibility to apply for DTT rates at source or through a quick refund provided that the relevant documentation is submitted by the Clearstream Banking deadline.

Relief at source

The documentation requirements to obtain DTT rates at source are the following:

  • One-Time Certificate for Italian Equities (OTC), if not already provided in the past. The OTC is valid until revoked. One-Time Master Instruction/Dividends at Source (O.T.M.I.): completed and signed by the beneficial owner for which relief at source is requested. It includes the different possibilities of tax relief. If an OTC was already provided in the past requesting the benefit of the 1.20% or 11% tax rates for UK residents, it must be revoked and replaced by a new O.T.M.I reflecting the new status of the UK resident;
  • Certificate of Residence: issued by the beneficial owner’s local tax authorities and confirming, among other things, that the beneficial owner is resident in accordance with Article 4 of the DTT between its country of residence and Italy. If a valid Certificate of Residence (COR) was provided in 2020 to benefit from the 1.20% or 11% tax rates, the COR could be used from 1 January 2021 until 31 March 2021 to benefit from the DTT.
  • Italian Equities: List of Beneficial Owners, if applicable.

Quick refund

A quick refund of withholding tax on dividends from Italian equities is available for eligible beneficial owners who did not obtain relief at source by providing the same documentation as for the relief at source.

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 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, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.