Portugal: Reactivation of the standard refund service
Clearstream Banking1 informs clients that effective
clients can start to provide their standard refund applications on income paid since 1 January 2022.
Following the activation of Clearstream Banking AG’s direct access to the Portuguese market (Interbolsa), for all Interbolsa issued securities which are T2S-eligible, Clearstream Banking had to momentarily suspend its standard refund offering for the payments that occurred from the migration date.
Clients should refer to Announcement C20022 for full details.
Impact on clients
Clients must pay attention to the statutory deadline which is set at two years from the end of the year of the income payment date.
Clearstream Banking clients are still recommended to request reduced tax rates via the relief at source or quick refund (where available) to avoid longer deadlines inherent to a standard refund process.
Scope of the new standard refund process
The standard refund process differs for the clients of Clearstream Banking S.A. and Clearstream Banking A.G. as follows:
For clients of Clearstream Banking S.A. (CBL 5-digit and CBF-i 6-series accounts):
- No standard refund of withholding tax on interest from Portuguese debt securities is available;
- A partial standard refund of withholding tax on dividends from Portuguese equities is available for beneficial owners who are residents of a double taxation country (DTT) country and did not obtain the treaty rate at source or via the quick refund (the “treaty standard refund”).
For clients of Clearstream Banking A.G. (CBF 7-digit account):
- Standard refund of withholding tax on interest from Portuguese debt securities is available for beneficial owners who are residents of a DTT country and did not obtain the treaty rate at source (the “treaty standard refund”);
- A partial standard refund of withholding tax on dividends from Portuguese equities is available for beneficial owners who are residents of a DTT country and did not obtain the treaty rate at source or via the quick refund (the “treaty standard refund”).
Market specifics and documentation
Reclaims of tax on dividend payments are normally filed electronically on the portal of the Portuguese Tax Authorities (PTA) while reclaims of tax on interest payments are sent in paper form. Due to a technical restriction imposed by the PTA to Clearstream Banking, the reclaims on dividends received from our clients cannot be filed electronically. This is being actively investigated with the PTA.
Until this restriction is levied, each reclaim file is sent to the PTA in paper form. This may have an impact on how quickly the reclaims can be processed. It may also impact the follow-up of the reclaims.
The documentation to be provided consists in:
- Before the first standard refund application, a Portuguese Tax Identification Number (TIN) Request for each beneficial owner applying for full standard refund and not already having a Portuguese TIN; this also has to be provided to obtain confirmation of an already existing TIN. Clients should always wait for the confirmation from Clearstream Banking that the TIN is valid before initiating their standard refund application;
- The Individualised Securities Registration Report (ISRR) completed by the client once a year and including all transactions (that is, domestic, internal Clearstream Banking or Bridge transactions) that took place during the year of the income payment;
- The official forms Mod.25 RFI, Mod.26 RFI for interest payments or Mod.22 RFI for dividend payments certified by a certificate of residence and accompanied with a power of attorney if not signed by the final beneficial owner (BO);
- A Power of Attorney for Tax Reclaim Processes Follow-up from the Beneficial Owner to Clearstream Banking (the PoA) must be provided to allow the payment of the PTA to the account of Clearstream Banking;
- A Letter of request to Clearstream Banking for Reclaim of Portuguese Withholding Tax;
Additional documentation depending on the status and residency of the BO:
- Statement for Funds: Declaration issued by the fund’s local authorities certifying that the respective trust or fund is liable to tax in its country of residence and is not transparent for tax purposes.
U.S. pension funds and Regulated Investment Companies (RIC)
- A form 6166 confirming that the pension fund or the RIC is liable to tax in the U.S.A., and
- A Statement for U.S. pension funds and RIC issued by the IRS or self-declaration confirming that the beneficial owner complies with the conditions foreseen in Article 17, number 1 c) and e) of the DTT between Portugal and the U.S.A.
A COR stating that the entity is considered as a SICAV for the year of the income. The COR is valid for one (1) year date-to-date unless otherwise specified on the document.
Swiss pension funds
Statement for Swiss pension funds: Declaration issued by the pension fund’s local authorities certifying that the respective entity is
- a pension fund in which individuals participate to secure old-age, disability and survivors' insurance; and
- the pension fund is established, recognised for tax purposes and controlled under the laws of Switzerland, is liable to tax in its country of residence and is not transparent for tax purposes.
For full standard refund details per type of instrument and type of beneficial owners, clients are asked to refer to the Market Taxation Guide – Portugal under the relevant section Clearstream Banking Luxembourg or Clearstream Banking Frankfurt.
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 Mergenthalerallee 61, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.