Czech Republic: Changes to the tax procedure for domestic securities : updated
Note: This Announcement, originally published on 6 March 2013, is now updated to reflect a clarification of the deadlines for quick refund. Changes are highlighted.
Further to our announcement
Czech Republic: New direct link to CSD Prague and change of depository L13030, dated 4 March 2013, and as of
25 March 2013
the following changes to the current tax procedure will be effective:
- Quick refund of tax withheld at source will be available for equities;
- New Declaration of Beneficial Ownership and Declaration of an EU/EEA Pension Fund must be submitted; and
- New deadlines for relief at source and quick refund.
Background
Clearstream Banking1 (CBL) will become a direct Participant of CSD Prague (Centralni depozitar cennych papiru) and this direct account will be operated by our new agent, UniCredit Bank Czech Republic a.s in Prague. UniCredit Bank Czech Republic a.s will also become our depository for the Czech T-bills, held in SKD (Ceska Narodni Banka, SKD Registracni centrum), at the Czech National Bank.
This direct account will have some impacts on our current tax relief procedure as explained below.
Important note: All other aspects of the tax procedure explained in our Announcement A13002 of 4 January 2013 remain applicable.
Quick refund on equities
Currently the quick refund is only available for Czech debt securities. We negotiated and agreed with UniCredit Bank to offer this service, on best efforts basis, for Czech equities.
Note: We remind you that CBL can give no guarantees with regard to the quick refund procedure as it is based on market practice and all applications depend on the good will of the paying agent. Although CBL will assist customers with quick refund applications, it can only remit to customers' accounts the amounts that it receives.
To apply for a quick refund from withholding tax on dividends from Czech equities, the same documents as for a relief at source and described in our Announcement L13002 of 4 January 2013 must be submitted to CBL.
New Declaration of Beneficial Ownership and Declaration of an EU/EEA Pension Fund
The current templates of the Declaration of Beneficial Ownership and of the Declaration of an EU/EEA Pension Fund are based on CBL’s current account with Citibank Europe plc. Owing to CBL’s new account with CSD Prague, these templates are no longer applicable and, as a result, the Declarations submitted in the past will become invalid.
In order to apply for relief at source/quick refund/standard refund, customers must submit after 25 March 2013 new one-time declarations per beneficial owner that holds Czech securities in CBL. The templates attached at the end of this announcement are mandatory. The same certificate is valid for all interest and dividend payments. Any tax relief at source/quick refund/standard refund application for which the new Declaration of Beneficial Ownership or Declaration of an EU/EEA Pension Fund has not been submitted, will be rejected and the respective positions will be/remain taxed at the maximum 35% rate.
New deadlines for relief at source and quick refund
For relief at source
In order to benefit from relief at source on income from Czech securities, customers need to ensure that we receive the tax documents by the following deadlines:
Original certificates: at the latest nine business days before the respective income payment date by 10:00 CET.
List of beneficial owners: at the latest seven business days before the respective income payment date by 10:00 CET.
Important Note: There is no consolidated record date in Czech Republic. Record date may differ from one type of security to another and also from one income payment to another. As a result, above deadlines may be subject to changes. Customers are required to double-check the deadlines indicated in the tax notification sent before each income event.
For quick refund
Documentation must be received by CBL by the following deadlines:
- Interest payments: At the latest by 10:00 CET on the 13th calendar day of the month following the month in which the income was paid (or, if the 13th of the month is not a business day, the last business day before that);
- Dividend payments: At the latest by 10:00 CET on the 13th business day after the respective payment date.
These deadlines may be subject to change at the decision of the issuer and, in such cases, customers will be informed accordingly.
Further information
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.
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1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500 (CBF) and 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).