Relief at source - eligibility, documentation, deadlines - Israeli equities

23.07.2021

Who can obtain relief at source?

Relief at source from withholding tax on dividends from Israeli equities 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 25%, 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 equities 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

Then, to obtain relief at source, you must submit:

  • No certification is required in order to obtain exemption at source, as the exemption is applied automatically based on the Israeli Securities One-time Certificate for Israeli financial institutions acting as intermediaries.

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 equities 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.