Quick refund - eligibility, documentation, deadlines - Hungarian equities
Who can apply for a quick refund?
Quick refund of withholding tax on dividends from Hungarian equities is available through Clearstream Banking for the following eligible beneficial owners (who have not benefit from relief at source):
Eligible beneficial owners | Effective tax rate after refund | Tax refund available |
Legal entities not resident in Hungary | 0% | 15% |
Legal entities resident in Hungary | 0% | 15% |
We remind our customers that quick refund is available only if the issuer agrees to potentially revise his declaration towards the HTA. Should the issuer not offer such possibility, Clearstream Banking will inform customers before the respective income event via SWIFT MT568.
Note: Clearstream Banking can give no guarantees with regard to the quick refund procedure as it is based on market practice and all applications depend on the good will of the paying agent. Although Clearstream Banking will assist customers with quick refund applications, it can remit to customers' accounts only the amounts that it receives.
Documentation requirements
To apply for a quick refund of withholding tax on dividends from Hungarian equities, customers must submit to Clearstream Banking:
- One-Time Certificate for dividend payments on Hungarian equities
If not provided before, an original One-Time Certificate should be duly completed and signed by Clearstream’s customer. It specifies, among other things, whether the customer is the sole beneficial owner of all the Hungarian securities held in the account.
The document must be provided once and remains valid until revoked. However, any changes to any details must be communicated in a new One-Time Certificate.
- Per-payment instruction
From 25 January 2022 onwards, the list of beneficial owners is replaced by a per-payment instruction, per each tax rate required, provided via swift (formatted MT565) or Xact Web Portal message (please refer to the Customer Handbook or Xact via SWIFT User Guide for full formatting requirements) and containing all mandatory information per beneficiary status and residency.
Legal entities do not need to be disclosed, only the payment details and the breakdown of positions (according to the final beneficial owners' status and residency) should be indicated in the revised per payment instruction.
For legal entities, no further documentation needs to be provided, unless required by the issuer and/or the Hungarian Tax Authorities.
Deadline for receipt of documents
Upon the confirmation of the quick refund applicability, the following deadlines apply:
Equities | Deadline |
Per-payment instruction and original certificates | At the latest by 10:00 CET on 15 December of the year in which the dividend payment took placea. |
a. In case of change of deadline or quick refund unavailability customers will be notified via SWIFT MT568.
When are quick refunds received?
The estimated time for receiving a quick tax refund is between two weeks and two months from the date of receipt of the revised tax breakdown by the Hungarian issuer.