Relief at source - eligibility, documentation, deadlines - Israeli debt securities
Who can obtain relief at source?
Relief or exemption at source from withholding tax on interest from Israeli Government bonds issued before 8 May 2000 is available for eligible beneficial owners through Clearstream Banking as follows:
Eligible beneficial owners | Rate applicable at source |
Residents of a Double Taxation Treaty (DTT) country | Tax treaty rate or 23%, whichever is lower |
Tax-exempt entities | 0% |
Israeli financial institutions, acting as intermediaries (not beneficial owners) | 0% |
Documentation requirements
To obtain relief at source from withholding tax on interest from Israeli Government bonds issued before 8 May 2000 for eligible beneficial owners through Clearstream Banking, documents must be submitted as follows.
Non-residents
To be able to hold Israeli securities, you must have submitted:
Israeli Securities - One-time Certificate.
Then, to obtain relief at source, you must submit:
- Breakdown of Holdings (only required for omnibus accounts);
- Certificate of Residence (only required if the beneficial owner is claiming DTT and if the part H is not completed on form A114);
- Form A/114 (only required if the beneficial owner is claiming DTT).
plus, if the beneficial owner is a tax-exempt entity:
- Certificate of Tax Exemption; and
- Official government or corporate document confirming that the customer is a tax-exempt pension fund.
Israeli financial institutions (intermediaries):
To be able to hold Israeli securities, you must have submitted:
- Israeli Securities - One-time Certificate for Israeli financial institutions acting as intermediaries
No other documentation is necessary to obtain exemption at source.
Eligible beneficial owners for whom the customer does not provide the required documentation will not be able to obtain relief but will be recorded as “undisclosed” and will consequently be subject to withholding tax at the maximum applicable rate.
Deadlines for receipt of documents
Documentation for relief at source from withholding tax on interest from Israeli Government bonds issued before 8 May 2000 must be received by Clearstream Banking by the following deadlines:
Document | Deadline for receipt by Clearstream Banking |
Israeli Securities - One-time Certificate | Before execution of the first trade in Israeli securities to be settled in Clearstream Banking. |
Israeli Securities - One-time Certificate for Israeli financial institutions acting as intermediaries | Before execution of the first trade in Israeli securities to be settled in Clearstream Banking. |
Breakdown of Holdings | Two business days after each relevant interest record date by 10:00 CET. |
Form A/114 | Two business days after the first relevant interest record date by 10:00 CET. |
Certificate of Residence | Two business days after the first relevant interest record date by 10:00 CET. |
Certificate of Tax Exemption | Two business days after the first relevant interest record date by 10:00 CET. |
Official government or corporate document confirming that the customer is a tax-exempt pension fund | Two business days after the first relevant interest record date by 10:00 CET. |