Sweden: Quick refund for Ericsson DR in foreign collective safe custody

Clearstream Banking¹ informs customers that the dividend payment distributed from Ericsson DR US2948216088 with record date 1 October 2021 is subject to 30% Swedish withholding tax by default in Clearstream Banking.

Customers may, however, benefit from a quick refund for their underlying beneficial owners according to the tax procedure for Swedish depository receipts (DRs).

Eligible beneficial owners

Quick refund is available for the following types of beneficial owners:

• Residents of a double taxation treaty country (DTT); and
• Tax-exempt U.S. pensions under IRS sections 401(a), 501(a) and 457(b) (0%); and
• Tax- exempt Canadian and Swiss pensions (0%); and
• Tax-exempt Undertakings for Collective Investment in Transferable Securities (UCITS) resident in a European Union member state.

Documentation requirements

To obtain a quick refund from Swedish withholding tax, customers must submit to Clearstream Banking the following documentation:

Per-payment instruction

A per-payment instruction, per each tax rate required, via SWIFT or Xact Web Portal message (for full formatting requirements, please refer to the Customer Handbook or Announcement D18075).

The instruction must include:

• Customer account number
• ISIN code;
• Corporate action ID;
• Record date;
• Total holding;
• Tax rate and number of DRs to apply per each beneficial owner;
• Beneficial owner name;
• Beneficial owner address for tax purpose;
• Country of tax residence (ISO two-letter code);
• Entity type;
• Tax identification number;
• The total holding that remains undisclosed, if applicable.

Important note:

The following statement must in addition be included in the per-payment instruction if customers are instructing on behalf of tax-exempt U.S. pensions under IRS sections 401(a), 501(a) and 457(b) (0%):

“we, [name of Clearstream Banking customer], hereby confirm that each U.S. pension cited below meet the following tax reclaim requirements:

the pension fund/trust is:

1. organized under the laws of the U.S.

2. established and maintained in the U.S. primarily to administer or provide pensions or other similar remuneration, including social security payments.

3. tax-exempt in the U.S. with respect to the activities described in item 2 above.

4. comprised of participants within the fund of which more than 50 percent are American residents.

5. a resident of the United States, provided that such dividends are not derived from the carrying on of a trade or business by the pension fund or through an associated enterprise.

6. confirming that the underlying security has been held in the account for at least two months prior to submitting the tax reclaim to Globetax. If the shares are part of a securities lending transaction over record date, the two-month holding period is considered interrupted and as a result disqualifies the pensions eligibility to claim at the exempt rate.“

Additional beneficial owner specific documentation

In addition to the per-payment instruction, customers are requested to refer to the original DTCC notice in order to view the exact eligibility criteria and the specific documentation requirements applicable to each eligible beneficial owner type.

For full details regarding these requirements, please refer to the original DTCC notice available from DTCC website (CUSIP / Security name can be used to retrieve the notice).

Customers are strongly encouraged to obtain this notice to ensure they are aware and comply with the full requirements for this event.

All required documentation (except the per-payment instruction) must be sent to the following address:

Clearstream Operations Prague s.r.o.
Attn: PTR - Tax Services
Futurama Business Park Building B
Sokolovska 662/136b
CZ-18600 Prague 8
Czech Republic

Deadline

In order to benefit from a quick refund of the above security, customers must ensure that Clearstream Banking receives the above-described documents by 10:00 CET on 27 October 2021 at the latest.

Default action

If no instruction and certification, if applicable, is received prior to the prescribed deadline, Clearstream Banking will apply the maximum default rate of withholding tax for the applicable dividend payment.

Important note:

Clearstream Banking will not take any responsibility for any losses, claims, penalties, taxes and interest thereon due to no action taken by the customer regarding above matter or receipt of documents after the indicated deadline.

The Clearstream Banking customer is at all times responsible for ensuring that final beneficial owners are eligible for the tax rates applied for, including the Clearstream Banking default rate. Neither Clearstream Banking nor its local depository or operator has any direct or indirect liability towards the Swedish authorities in this regard.

In addition, if Clearstream Banking is informed after the above-mentioned instruction deadline that a beneficial owner has obtained a quick refund to which they are not entitled (for example, due to incorrect entitlement, data, certification etc), Clearstream Banking will not assist in withholding the tax or returning it back to the respective tax authorities.

Further information

For further information, please contact the Clearstream Banking Tax help Desk, Clearstream Banking Client Services or your Relationship Officer.

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1. This Announcement is published by Clearstream Banking AG (CBF), registered office at Mergenthalerallee 61, 65760 Eschborn, Germany, registered with the Commercial Register of the District Court in Frankfurt am Main, Germany, under number HRB 7500.