Portugal: Additional documentation for Swiss pension funds
Effective
immediately
our depository informed Clearstream Banking1 of recent information obtained from the Portuguese Tax Authorities regarding additional documentation to be provided by Swiss pension funds who intend to benefit from the 5% reduced rate on dividends, as foreseen by the Double Taxation Treaty (DTT).
Background
As per the article 3 of the Supplementary protocol being part of the Portuguese-Switzerland Income and Capital Tax Treaty (DTT) signed on 26 September 1974, as amended by the Protocol of 25 June 2012, dividends distributed by a Portuguese company are subject to 5% withholding tax rate when paid to a Swiss pension fund provided that the following conditions are met:
- The Swiss pension fund is a pension fund in which individuals participate to secure old-age, disability and survivors' insurance; and
- The Swiss pension fund is established, recognised for tax purposes and controlled under the laws of Switzerland.
Both conditions must be confirmed to the Withholding Tax Agent/Portuguese Tax Authorities through a statement issued by the relevant Swiss Tax Authorities and submitted in addition to the requested tax documentation.
Impact on customers
Swiss pension funds may apply for tax relief on Portuguese dividends at source or via the quick or standard refund by providing the following certification within the prescribed deadlines:
Relief at source and quick refund
Statement for Swiss pension funds
This statement duly completed and signed by the relevant Swiss Tax Authorities is valid:
- One year date to date if no specific tax year is mentioned on the statement, or
- One calendar year with validity end date on the 31/12 of the year in which the statement is provided if a tax year is mentioned on the statement.
Note: If the fiscal year is not mentioned on the statement, the date of signature should be before the payment date to allow a quick reclaim application.
The statement must be received by Clearstream Banking in original. Attached below is an example of the template to be used, according to the confirmation received from our local custodian. However, we emphasise that this template is provided for information purposes only and shall neither be considered as an official document nor as legal advice from Clearstream Banking as no official template has been published by the Portuguese Tax Authorities.
Position Breakdown Report (PBR)
Reporting requirement indicating the position held per respective beneficial owner on the record date of each dividend payment.
Customers that hold the securities for eligible beneficial owners but do not provide Clearstream Banking with the relevant reporting will not be able to benefit from tax relief and will be recorded as "undisclosed".
Form Mod. 21- RFI
The Mod. 21- RFI contains the beneficial owner's information, including the Portuguese TIN (if available), and the dividend payment details. It must be signed by the beneficial owner and certified by the local tax authorities, unless a separate Certificate of Residence (COR) is provided.
The MOD 21 RFI is valid for one year date-to-date, unless otherwise specified on the accompanying CoR
Power of Attorney
A copy of the Power of Attorney is to be provided with each application if Mod.21- RFI is not completed by the final beneficial owner
Portuguese Tax Identification Number (TIN) request
The TIN request is needed when the beneficial owner did not obtain yet a Portuguese TIN.
Standard refund
Position Breakdown Report (PBR)
Reporting requirement to be provided for each standard reclaim application and including the position held at record date by each beneficial owner applying for tax refund.
Individualised Securities Registration Report (ISRR)
The ISRR is completed by the customer once a year and includes all transactions that took place during the year of the dividend payment. It has to be provided for each reclaim application.
Statement for Swiss pension funds
As described above.
Note: If the fiscal year is not mentioned on the statement, the date of signature should be before the payment date to allow a quick reclaim application.
Form Mod. 22-RFI
The Mod. 22- RFI contains the beneficial owner's information, including the Portuguese TIN, and the dividend payment details. It must be signed by the beneficial owner and certified by the local tax authorities, unless a separate Certificate of Residence (COR) is provided.
Power of Attorney
A copy of the Power of Attorney is to be provided for each application if Mod-22 RFI is not completed by the final beneficial owner; and
Letter of Request for Reclaim to Clearstream Banking
The Letter of Request containing the details of the dividend payment for which the customer is requesting the refund as well as the details of the BO has to be provided for each reclaim application.
Deadlines
Relief at source
At the latest, one business day before the record date of the first dividend payment date to which it applies, by 10:00 CET.
Quick refund
At the latest by 10:00 CET on the 10th of the month (or the last business day before that, if the 10th is not a business day) following the month in which the first dividend payment was made in the respective year.
Standard refund
At the latest three months before the end of the second year following the year in which the dividend payment took place.
Further Information
For further information, customers may contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services 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, and 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.