Summary of major tax changes since 1 January 2012

Australia

10 May
A12095

Tax on MIT distributions increased for EOI beneficial owners

According to the budget for 2012-13 and effective 1 July 2012, the final withholding tax on Australian income (other income/ fund components) distributed by Managed Investment Trusts (MITs) will increase for beneficial owners resident in Exchange of Information (EOI) countries from 7.5% to 15%.
For fund payments made to beneficial owners in non-EOI countries, the rate of withholding tax will remain unchanged at 30%.

Austria

9 March
A12051

Tax exemption for EU/EEA pension funds and legal entities

Further to our Announcement A11036, customers are reminded that the Austrian Ministry of Finance has decided to refund withholding tax that was levied on dividends paid to certain European Union (EU)/European Economic Area (EEA) pension funds and legal entities.
As defined in §§6 and 21 of the Austrian Corporate Income Tax Act (ACITA), foreign pension funds and legal entities are entitled to a full tax refund provided that they have the same status as comparable Austrian entities.

Belgium

12 January
A12010

New withholding tax rates

Effective since 1 January 2012, new withholding tax rates apply on Belgian debt securities, VVPRs, SICAVs and SICAFIs. As a consequence, Clearstream Banking will apply the following standard rates:

Debt:

• 0% on NBB-eligible bonds; and
• 21% on bonds eligible in Euroclear Settlement for Euronext zone Securities “ESES”, with the possibility to apply for a reduced tax rate through the current procedures.

Strips Verlaagde Voorheffing / Précompte Réduit (“VVPR”):

The advantageous tax rate applied on VVPR strips is reduced from 10% to 4% (i.e. the actual tax reduction is no longer from 25% to 15% but from 25% to 21%).

SICAVs and SICAFIs:

In general, the standard tax rate applied on SICAVs and SICAFIs has been increased from 15% to 21%. Exceptions are the SICAFIs Serviceflats Invest, Home Invest and Aedifica, for which the tax rate applied before 1 January 2012 remains unchanged until further notice.

Croatia

29 February
A12043

New withholding tax rate on dividends

Effective since the 1 March 2012, the withholding tax rate on dividends paid from Croatian equities is increased from 0% to 12%.
No relief at source or standard refund of withholding tax is currently available on income from Croatian equities held with CBL.

France

5 April
A12075

New address for requesting Attestations regarding tax on French issuer distributions

The following new dedicated email address has been created for Clearstream Banking customers to request an attestation in connection with the withholding tax applied to distributions paid by French issuers (the “Attestation”): att2777@clearstream.com.
We remind customers the delivery of such an Attestation may take up to 25 calendar days from the date a valid request is received by Clearstream Banking.

Germany

1 February
A12020

Implementation of the OGAW-IV Umsetzungsgesetz (UCITS IV Directive) Part II

Further to our Announcement A11152, dated 14 October 2011, we hereby provide information about the processing on short entitlements on German market and reporting details for tax payments on German accumulation / growth funds.

Greece

3 January
A12003

16 April
A12081

Implementation of Capital Gains Tax postponed
Implementation of Capital Gains Tax

The Greek Parliament has approved the proposal to postpone the implementation of the Capital Gains Tax until 1 January 2013.
Until the implementation of the proposed Capital Gains Tax, the 0.20% sales tax on equities transactions will continue to apply.

Iceland

2 May
A12091

New information regarding withholding tax on equities

The RSK have reviewed their guidance regarding the applicable taxation treatment of dividends and transactions on Icelandic equities, as follows:

Dividends:

• The full dividend distribution is taxable at the standard withholding tax rate of 20% (18% for foreign legal entities);
• Withholding and reporting responsibilities do not rest with CBL but with the issuer distributing the dividend.

Capital Gains:

• Capital gains on equity transactions are calculated based on trade price and are taxable at the standard rate of 20% (18% for the foreign legal entities);
• A bill has been introduced in parliament that aims at clarifying the responsibilities for withholding tax on capital gains. Until the bill is approved, no withholding tax on capital gains on equities will be applied.

Italy

9 January
A12008

Reminder: Annual renewal of Certificate of Residence (revised - 11% rate reintroduced)

In order to obtain relief at source on dividends from Italian equities paid during the period from 1 April 2012 to 31 March 2013, customers had to ensure Clearstream Banking receives renewed Certificate of Residence for eligible beneficial owners no later than 16 March 2012.
The validity of the Certificate of Residence that Clearstream Banking previously held, for non-resident beneficial owners eligible to obtain tax relief on dividends paid for Italian equities, expired on 31 March 2012.

Italy

26 January
A12021

11% reduced tax rate reintroduced for EU/EEA pension funds

Pension funds resident in EU/EEA countries are eligible to apply for the 11% reduced tax rate on Italian dividends paid as of 1 January 2012 (before the new publication, such funds were supposed to be taxed, as of 1 January 2012, at 20% on dividends).

Italy

18 April
A12085

Clarifications for the new standard refund process

Various clarifications from the Italian Tax Authorities have been obtained with regard to the standard refund process and more precisely about the Power of Attorney, Electronic signatures, Italian TIN number, Stamp of the company, the new standard refund forms and Credit Advice.

Japan

30 March
A12071

Taxation processing on income from listed and unlisted securities

The effective rates of withholding tax for all non-resident beneficial owners are as follows:

• For listed equities, Exchange Traded Funds (ETFs) and listed Real Estate Investment Trusts (REITs), the rate is 7% (until December 2012) and 7.147% (for 2013);
• For unlisted equities, the rate is 20% or less if resident of a country that has a DTT with Japan.

Clearstream Banking customers can benefit from tax exemption and/or relief at source from withholding tax on income from Japanese listed and unlisted securities. However, a renewal of all certifications in place is required to benefit from any exemption or reduced tax rate and any previous certification in place for listed unlisted equities has been revoked on 6 April 2012.

Poland

24 April
A12087

New withholding tax procedures for domestic securities

Further to the implementation of the omnibus accounts in the local market, all Polish assets eligible in Clearstream Banking Luxembourg (CBL) are deposited on our new omnibus account with Bank Handlowy w Warszawie SA (Bank Handlowy), our depository in Poland. As a result, the nominee concept is recognised within the new account structure. The possibility to apply tax relief depends now on the status and residency of the final beneficial owners of the securities.
We provide information about the withholding tax procedures applicable for income (interest, dividends) and redemption from Polish domestic securities paid as of 15 May 2012.

Poland

30 April
A12090

Tax reclaim procedure for payments made before 15 May 2012

Clearstream Banking reminds its customers the procedure to be followed in order to reclaim tax overwithheld at source on interest, redemption or dividend payments made before 15 May 2012.

Portugal

3 January
A12005

State Budget Law 2012 ratified

Effective since 1 January 2012, the Portuguese State Budget Law for 2012 was ratified by the President of Portugal. The impacts on the current tax procedure via Clearstream Banking are as follows:

New withholding tax rates

• 30% on fixed income and dividends paid to beneficial owners who are undisclosed or resident in tax havens;
• 25% on fixed-income and dividend payments made to disclosed resident and non-resident beneficial owners;
• 0% (tax exemption) or reduced tax rate granted through DTT or Portuguese domestic legislation upon receipt of the required documentation within the prescribed deadlines.

EU/EEA Pension Funds

Tax exemption is available on dividends paid to EU/EEA Pension Funds provided that certain conditions are met:

• The Pension Fund grants exclusively the payment of retirement benefits (including pre-retirement or anticipated retirement), post-employment health benefits and, when provided on an ancillary basis, payment on death.
• The Pension Fund is managed by institutions performing Pension Plan Schemes under Directive 2003/41/EC of the European Parliament and the Council of 3 June 2003.
• The Pension Fund is the final beneficiary of the income.
• In the case of dividends, the shares were previously held for a period of 12 months.

Portugal

13 March
A12056

Certification requirements for EU/EEA pension funds

Additional information has been obtained about the tax certification to be provided by pension funds domiciled in other European Union (EU) Member States or in European Economic Area (EEA) countries in order to apply for exemption from tax on Portuguese dividends at source or via quick refund.
Full Standard refund on dividends is not available through Clearstream Banking.

Portugal

14 May
A12096

Certification requirements for EU/EEA pension funds - update

Further clarification on these conditions for EU/EEA pension funds has been obtained: Regarding the 12-month of uninterrupted period of dividend holding, the Portuguese Tax Authorities (PTA) have clarified that confirmation of this condition must be made through a declaration issued by the bank where the EU /EEA pension fund has the direct account (per income payment).

South Africa

24 February
A12041

Dividend and interest withholding tax rates to be increased

Effective since 1 April 2012, withholding tax is applicable to South African equities at a standard rate of 15%.

South Africa

23 March
A12063

Dividend withholding tax and procedures for relief, exemption and reclaim

With the introduction of a withholding tax rate of 15% on South African equities as previously announced (T08028, T11046, A12006), relief at source, quick refund and standard refund procedures are available to Clearstream Banking customers and their underlying beneficial owners.

South Africa

19 April
A12086

New exemption certification requirements for equities

It has been further clarified by the South African Revenue Service (SARS) that customers who submit a request for exemption to us (that is, at source, via quick refund or standard refund) on behalf of beneficial owners eligible for exemption with regard to dividends from South African Equities, must submit supportive documentation that has been validated either by SARS or by an external tax advisor.
Note: These requirements are not applicable to such exemption requests with regard to equities issued by foreign corporations and secondarily listed on the JSE (referred to in A12063 and herein as “Inward Listed Equities”).

South Korea

26 March
A12065

New official tax certificates

Further to our TaxFlash T12008 and effective on the 1 July 2012, the new official tax forms released by the South Korean government must be submitted by eligible foreign investors in order to enjoy the reduced tax rate under a Double Taxation Treaty (DTT) signed between their country of residence and South Korea.

South Korea

4 April
A12074

Disclosure of address and personal ID number of beneficial owners

Beginning with dividends with record dates in December 2012, all Clearstream Banking customers will be required to provide the full address and valid personal ID numbers (which include, but are not limited to, social security, passport, driver’s licence, taxpayer ID, and resident registration numbers) for all beneficial owners holding securities in South Korea and claiming favourable rates under a Double Taxation Treaty (DTT).
However, the Ministry of Strategy & Finance has relaxed this requirement for investors holding American and Global Depository Receipts (ADRs and GDRs) such that customers will not be required to provide the Application for Reduced Tax Rate form on behalf of beneficial owners of ADRs and GDRs.

Spain

2 January
A12001

New withholding tax rate

Effective since 1 January 2012, the withholding tax rate on interest and dividend payments is, until 31 December 2013, increased from 19% to 21%. Therefore, customer positions for which no valid tax certification is received by Clearstream Banking will be taxed during this period at 21% (the possibilities to apply for quick refund or standard refund of tax withheld at source remain unchanged).

Spain

18 January
A12004

27 February
A12042

Increased tax rate in the Navarra Autonomous Region
New increased tax rate in the Navarra Autonomous Region

The withholding tax rate on interest and dividend payments made by companies resident in the Navarra Autonomous Region was first increased from 18% to 19%. Afterwards, and with effective date the 23 February 2012, this rate was again increased from 19% to 20%.

Spain

3 April 2012
A12073

Consolidated tax procedure for Spanish debt securities

Effective since 16 April 2012, the new tax procedure must be used in order to obtain tax exemption on interest from Spanish debt subject to Royal Decree 1145/2011 (RD 1145/2011) and held with Clearstream Banking.
Beneficial owners who are non-Spanish residents or Spanish legal entities subject to domestic corporate tax (“Spanish corporations”) are entitled to exemption from withholding tax upon submission of the required certification by the prescribed deadlines.

Spain

13 April
A12080

Consolidated tax procedure - uploading beneficial owner list

The List of Spanish Entities template can be uploaded via the “Upload Beneficial Owner Lists” page of the Clearstream website.

Sweden

6 February
A12028

23 March
A12061

27 March
A12068

Dividend withholding tax for investment funds abolished
Relief at source and quick refund available on dividend withholding tax for investment funds
Relief at source and quick refund available on dividend withholding tax for investment funds - update

Effective since 1 January 2012, the withholding tax on Swedish sourced dividends was abolished for foreign investment funds qualified as "fund undertakings" (fondföretag), and domiciled either:

• Within the EEA;
• In a state with which Sweden has entered into a tax treaty which contains an article on exchange of information; or
• In a state with which Sweden has entered into an agreement on the exchange of information in tax matters.

Such eligible funds are:

• Funds established in accordance with the UCITS directive (2009/65/EC); and
• Non-UCITS funds that are authorised by the Swedish Financial Supervisory Authority to market and sell units in the fund in Sweden.

Qualifying Fund Undertakings may apply for Relief at source and Quick refund and should provide:

• One-Time Certificate for Swedish Equities, submitted before the first applicable interest payment date; and
• List of Beneficial Owners (when applicable); and
• For funds established in accordance with the UCITS directive (2009/65/EC), a certificate issued by the local authority, similar to the Swedish Financial Supervisory Authority, stating that the fund is so established; or
• For Non-UCITS funds authorised by the Swedish Financial Supervisory Authority to market and sell units in the fund in Sweden, a certificate from the Swedish Financial Supervisory Authorities stating that the fund is so authorised.

U.S.A.

1 February
A12023

QI agreement renewal and FATCA compliance

The U.S. Internal Revenue Service (IRS) had previously published a News Bulletin confirming that all Qualified Intermediaries (QIs) who needed to renew their QI agreements during the period between January 2012 and June 2012 were, as previously announced in their Notice 2011-531, automatically granted a postponement.

U.S.A.

9 February
A12031

FATCA - Proposed regulations for FATCA implementation

Treasury and the IRS issued the proposed regulations for the following major phase of implementing the Foreign Account Tax Compliance Act (FATCA):

• Reducing the administrative burdens associated with identifying US accounts;
• Expanding the categories of FFIs that are deemed to comply with FATCA without the need to enter into an agreement with the IRS;
• Expanding the categories of FFIs that are deemed to comply with FATCA without the need to enter into an agreement with the IRS.

U.S.A.

30 March
A12070

Annual reminder: Tax certification procedure for U.S. Foreign Targeted Bonds in registered form

Customers who hold U.S. Foreign Targeted Bonds in registered form in Clearstream Banking are reminded that an annual U.S. Foreign Targeted Interest Certificate for the year 2012 attesting non-U.S. beneficial ownership of such securities must be filed with us.