Portugal: New forms MOD.21-RFI and MOD.22-RFI published by the Portuguese tax authorities - update
Note: This announcement, originally published on 4 September 2020, has been updated following additional guidance provided by the Portuguese tax authorities. The changes have been highlighted.
Clearstream Banking1 would like to inform customers that changes to the double taxation treaty (DTT) forms MOD.21-RFI and MOD.22-RFI have been approved by Notice No 8363/2020 officially published on 31 August 2020.
the new forms MOD.21-RFI and MOD.22-RFI must be used when requesting the benefits of the DDT at source or through a quick or standard refund of tax withheld on dividend payments.
The certification requirements of Mod.21-RFI and MOD.22-RFI were amended in 2019, following the publication on 1 October 2019 of the new law no 119/2019 eliminating the direct certification on the forms by the tax authorities of the country of residence of the beneficial owner. Only accompanying certificates of residence can be considered as a valid certification of the DTT forms. This is further to A19116 and A20011.
According to Notice N°8363/2020, issued by the Secretary of State for Tax Affairs, the forms have been updated to comply with the new certification requirements.
The major change concerns the box for the “certification by the competent tax authorities of the beneficial owners state of residence” (Box III in Form MOD. 21-RFI and Box IV in Form MOD.22-RFI), which has been replaced by a box to mark the attachment of the “proof of the beneficial Owner’s State of residence”. It clearly states that “this form is only valid when accompanied by proof of the beneficial owner's state of residence. for the purpose of proof of the beneficial owner's state of residence, in the period concerned, of the entity identified in box IA certificate issued by the competent authorities of the respective state of residence shall be attached, within the provisions of article 4 of the convention for the avoidance of double taxation, proving the tax liability.”
The instructions for completion of the forms have also been amended to reflect the changes, among which the following are noticeable:
- The introduction of a clarification that the forms must be accompanied by a certificate of residence issued by the competent authorities of the contracting state, certifying that the entity identified in the form (box I) was resident for tax purposes, under the terms of article 4 of the convention for the avoidance of double taxations, in the period concerned, and was liable to income tax. If a “subject to tax” clause applies, subjection to income tax certification is also required.
- The forms only need to be prepared in duplicate and not in triplicate (due to the elimination of the copy for the tax authorities of the beneficiary’s country of residence).
- A clarification on the validity of MOD. 21-RFI, stating that the form is valid for a maximum period of one year and that it expires on the last day of the period identified in the certificate of resident, for instance, the form can only be used to provide double taxation. Treaty rates to the income payments that occur within the period mentioned in the certificate of residence.
Impact on customers
From now on, customers must use the new form MOD.21-RFI for relief at source and quick refund and form MOD.22-RFI for standard refund of withholding tax on dividend payments, both certified by a separate certificate of residence.
Customers who have saved the former models in their internal procedures are recommended to delete the old models and to use the link to the website of the Portuguese tax authorities, available under Tax forms to use – Portugal - CBL.
The PTA clarified the procedure to follow if MOD.21-RFI or MOD.22-RFI are provided in the old format:
- Old version of MOD.21-RFI already filed to BNP Paribas Securities Services through Clearstream Banking and still within their validity period do not need to be renewed.
- Old version of MOD.21-RFI signed before 1 September 2020 and accompanied with a valid COR also issued before 1 September 2020 will still be accepted.
- Old version of MOD.22-RFI signed before 1 September 2020 and accompanied with a valid COR also issued before 1 September 2020 will still be accepted.
- Mod.21-RFI and Mod.22-RFI signed on or after 1 September 2020 or accompanied with a certificate of tax residency signed on or after 1 September 2020 must be provided in the new version.
Non-compliance to the above rules will result in an automatic rejection of the forms provided.
Additional information on the relief at source, quick refund and standard refund process are available in the Market Taxation Guide - Portugal.
For further details concerning the process of certification and the applicable deadlines please refer to the Market Taxation Guide - Portugal.
For further information, please contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services or your Relationship Officer.
1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.