Finland: Direct link with Euroclear Finland : Impact on tax procedures
Further to our Announcement L13063, dated 30 April 2013, regarding Clearstream Banking1 becoming a direct participant at Euroclear Finland’s OM system for equities and corporate bonds with effective date 24 June 2013, we hereby provide information about the foreseeable impact in CBL on the relief at source procedure with regard to withholding tax on dividends from Finnish equities.
Background
Relief at source of withholding tax on dividend payments from Finnish equities is currently available, under certain conditions, without the disclosure of beneficial owner details.
Relief at source from 24 June 2013 onwards
For dividend payments with record date as of 24 June 2013, CBL customers acting as intermediaries will only be able to continue to benefit from our relief at source procedure at the reduced rates of 15-29%, without submitting the full beneficial owner details, provided that the CBL customer:
- Is resident in a country with which Finland has concluded a Double Taxation Treaty (DTT); and
- Is registered, at the time of the dividend payment, in the Foreign Custodian Register maintained by the Finnish Tax Authorities, with CBL as its Representative.
CBL customers that do not fulfil these conditions will no longer be able to benefit from our relief at source procedure at the reduced rates of 15-29% without submitting the full beneficial owner details.
Note: There will be no impact on the tax procedure for:
- CBL customers that instruct for relief at source at the reduced rates of 0% - 14% or the maximum rate (30%); and
- Clearstream Banking AG customers, including customers holding “6-series” accounts.
To ensure their readiness for the change due to take effect on 24 June 2013, affected CBL customers are strongly recommended to perform the actions described below as soon as possible.
Actions to be taken by CBL customers to prepare for 24 June 2013 onwards
CBL customers that want to continue to benefit from our relief at source procedure at the reduced rates of 15-29% must take the appropriate action, as described in the following sections.
CBL customers acting as intermediary and resident in a DTT country
Customers are requested to be registered, at the time of the dividend payment, in the Foreign Custodian Register maintained by the Finnish Tax Authorities, with CBL as its Representative.
Customers must file their application for registration by submitting the following documentation directly with the Finnish Tax Authorities:
- If registering for the first time, an Application for Foreign Custodian (Intermediary) Register form 6154e; or
- If already registered but not with CBL as Representative, a Notice on Changes/ Termination Foreign Custodian (Intermediary) Register form 6153e; and
- An extract of the company registration from the Trade Register of the company’s country or other similar document2; and
- A list of Authorised signatures.
Once registration is complete, customers must inform CBL by submitting a Foreign Intermediary Registration with the Finnish Tax Administration form (see attachment).
N.B.: The processing time with the Foreign Custodian Register in order to obtain a registration ID is on average three weeks if the file is complete.
CBL customers acting as intermediary and resident in a non-DTT country
Customers will no longer be able to benefit from our relief at source procedure at the reduced rates of 15-29% without submitting the full beneficial owner details but such customers applying for relief at source are requested to provide CBL, for each dividend payment, with the beneficial owner’s name, address, date of birth and tax identification number (TIN).
Reporting to the Finnish Tax Authorities
As a part of our reporting obligation to the Finnish Tax Authorities, we will report the full name, address and TIN to the Finnish Tax Authorities for the following recipients of Finnish dividend payments via CBL:
- CBL customers acting as intermediary not disclosing the full beneficial owner details for the relief at source rates of 15-29%; and
- CBL customers holding own assets; and
- Beneficial owners that are disclosed; and
- CBL customers receiving dividend payments at the maximum tax rate (30%).
Further information
The Market Taxation Guide - Finland will be updated in due course to reflect the change of procedure and the Beneficial Owner Upload List facility used for the relief at source procedure will be updated accordingly to comply with the new requirements.
For further details regarding disclosure requirements, please refer to the CBL Disclosure Requirements - Finland.
For further information, customers may contact the Clearstream Banking Tax Help Desk on:
| Luxembourg | Frankfurt | |
| Email: | tax@clearstream.com | tax@clearstream.com |
| Telephone: | +352-243-32835 | +49-(0) 69-2 11-1 3821 |
| Fax: | +352-243-632835 | +49-(0) 69-2 11-61 3821 |
or Clearstream Banking Customer Service or their Relationship Officer.
------------------------------------------
1. Clearstream Banking refers to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Register of Commerce and Companies under number B-9248 (CBL).
2. To prove corporate status and to display the Business name, Domicile, Line of business, Accounting period and the Names of the directors/representatives authorised to sign for the company. If the Trade Register extract or other document does not display this information, the company’s Charter or Articles of association, Company by-laws or rules in which the required facts are displayed should be enclosed. A translation into English, Finnish or Swedish, as necessary, should also be enclosed.
| As a registered customer, subscribe to our free email alerts service to receive immediate, daily and/or weekly notification of the latest customer publications on our website. Unsubscribe at any time; we respect your email privacy. |