Standard refund – eligibility, documentation, deadlines – Slovenian debt securities (CEU)
Who can apply for a standard refund?
Standard refund of withholding tax on interest from Slovenian debt securities is available through Clearstream, provided that the final beneficial owner is either a qualifying non-resident person or entitled to a reduced tax rate on Slovenian interest according to a Double Taxation treaty signed between its country of residence and Slovenia.
Eligible beneficial owners | Effective rate of tax after refund | Tax refund |
Residents of Double Taxation Treaty (DTT) countries | Tax treaty rate or 25% b, whichever is lower | 25% minus the tax treaty rate c |
Non-resident legal entities | 0/10/15% d | 25/15/10% |
Slovenian legal entities | 0% | 25% |
EU/EEA Legal Entities | 0% | 25% |
EU/EEA pension/investment funds | 0% | 25% |
a. Expressed as a percentage of the gross interest amount.
b. 25% until 31 December 2019 and 27.5% until 31 December 2021.
c. Amount of refund will be 0% if the DTT rate exceeds 25%.
d. 0% or 10% on non-listed bank bonds/ 15% on non-listed corporate bonds.
Documentation requirements
In order to benefit from a standard refund of withholding tax on interest, client must follow one of the following procedures, depending on the status of the final beneficial owner:
Claiming according to the DTT rates
To apply for a refund, the following documentation must be submitted:
- Request for Refund of Tax on Interest based on Provisions of the Treaty on Avoidance of Double Taxation of Income (KIDO 10)
- Certificate of Residence issued by the beneficial owner’s local tax authorities to be submitted if the form KIDO 10 is not certified by the beneficial owner’s tax authorities
- Chain of Credit Advice from each intermediary between Clearstream and the final beneficial owner
- Power of Attorney in favour of KDD appointing KDD to act on its behalf for purposes of tax reclaim procedure.
- Letter of Request for Reclaim to Clearstream for reclaim of Slovenian withholding tax on interest payments
Claiming via written claim according to domestic law (383.d par. 1 of the zdavp-2)
The tax refund with written claim is in use if the Beneficial owner would be eligible for benefits already under the Slovenian legislation or under other possible treaty (i.e. contract, which is not a contract on avoidance of double taxation of income), and the procedure for refund of excessively paid tax is not particularly prescribed.
To apply for a refund, the following documentation must be submitted:
- The official written claim form.
- Chain of Credit Advice from each intermediary between Clearstream and the final beneficial owner
- Power of Attorney in favour of KDD appointing KDD to act on its behalf for purposes of tax reclaim procedure.
- Letter of Request for Reclaim to Clearstream for reclaim of Slovenian withholding tax on interest payments
Claiming full tax refund for EU parent companies and subsidiaries
A full standard refund can be applied for provided that the beneficial owner:
- Is an EU resident corporate entity fulfilling the conditions of EU Directive 2011/96/EU in accordance with Slovenian legislation;
AND
- Holds capital participation in the issuing company of at least 25%;
AND
- Has held the participation in the company on record date for at least 24 uninterrupted months.
When income is received by the beneficial owner through an intermediary other than the entity that calculated and withheld tax (that is, KDD), KDD can claim a refund of tax only if the above-mentioned conditions are fulfilled and the following certification is submitted by the client to Clearstream.
Upon approval of the tax application by the Slovenian Tax Authorities, overpaid tax is refunded to KDD and credited to the respective client by Clearstream.
To apply for a refund, the following documentation must be submitted:
- Statement on fulfilment of conditions for reduction of tax on interest based on 1st paragraph of the article 72 of the law on corporate income tax for interest payment
- Certificate of Residence issued by the beneficial owner’s local tax authorities
- Power of Attorney in favour of KDD appointing KDD to act on its behalf for purposes of tax reclaim procedure.
- Proof of minimum holding in the capital of a company
- Proof of maintaining the minimal holding for the period of 24 months
- Confirmation of no permanent branch in Slovenia
- Chain of Credit Advice from each intermediary between Clearstream and the final beneficial owner
- Letter of Request for Reclaim to Clearstream for reclaim of Slovenian withholding tax on interest payments
Claiming full tax refund for an EU/EEA resident entity
According to Slovenian legislation, the full tax amount withheld at source can be reclaimed for beneficial owners that are:
- A pension/investment fund non-resident in Slovenia and resident in an EU/EEA Member State (other than the Principality of Liechtenstein); or
- A non-resident of Slovenia resident in an EU/EEA Member State (other than the Principality of Liechtenstein)
that is unable to deduct the applicable Slovenian withholding tax in its country of residence.
When income is received by the beneficial owner through an intermediary other than the entity that calculated and withheld tax (that is, KDD), KDD can claim a refund of tax only if the above-mentioned conditions are fulfilled and the following certification is submitted by the client to Clearstream.
Upon approval of the tax application by the Slovenian Tax Authorities, overpaid tax is refunded to NLB and credited to the respective client by Clearstream.
To apply for a refund, the following documentation must be submitted:
- Statement of the beneficial owner completed and duly signed by the final beneficial owner,
- Power of Attorney in favour of KDD appointing KDD to act in his behalf for purposes of tax reclaim procedure.
- Certificate of Residence issued by the beneficial owner’s local tax authorities must be submitted to Clearstream
- Chain of Credit Advice from each intermediary between Clearstream and the final beneficial owner
- Letter of Request for Reclaim to Clearstream for reclaim of Slovenian withholding tax on interest payments
Additional documentation
For the purposes of any of the tax procedures described above, the tax authority may, at its own discretion, request additional documentation to prove that the beneficial owner is indeed the beneficial holder of the securities.
Statutory deadline for reclaiming withholding tax
The withholding tax reclaim must be filed with the Slovenian Tax Authorities no later than five years following the date on which the income was paid.
Clearstream deadline for standard refund applications
The deadline by which Clearstream must receive the documentation for a standard refund application is at the latest two months before the statutory deadline. All standard refund applications received after this deadline will be processed by Clearstream on a “best efforts” basis. However, in such a case, Clearstream will apply an extra charge and accepts no responsibility for forms that have not reached the Slovenian Tax Authorities by the date considered being the statute of limitations deadline
When are refunds received?
The estimated time for receiving a refund is 30 days from the date of receipt by the Slovenian Tax Authorities. This timing can vary depending on when the application is filed and on the complexity of the information supplied in the reclaim form.
Notes on tax reclaims
Clients warrant the completeness and accuracy of the information they supply to Clearstream.
It is the client's responsibility to determine any entitlement to a refund of tax withheld, to calculate the amount due and to correctly complete the required forms in due time. Clearstream is under no obligation to carry out any investigation in respect of such information.
With respect to reclaims in general, clients are reminded that Clearstream accepts no responsibility for their acceptance or non-acceptance by the authorities of the respective country