Finland: Residents of Liechtenstein now eligible for special EEA tax treatment
The Exchange of Information Agreement between Finland and Liechtenstein, signed on 17 December 2010, came into force on 18 July 2012.
In respect of income subject to withholding tax, the new provisions are effective for dividends received as of 1 January 2011.
Background
As of 1 January 2009, certain corporations and individuals domiciled in a European Economic Area (EEA) country could, provided that certain requirements were met, apply for reduced withholding tax rates of 18.38% and 21% respectively on dividends from Finnish equities.
However, residents of Liechtenstein could not benefit from this tax treatment because their country of domicile was not covered by an agreement on mutual assistance and exchange of information in tax matters, or by the Council Directive 77/799/EEC of 19 December 1977 concerning mutual assistance by the competent authorities of the Member States in the field of direct taxes.
Impact on customers
The new agreement may now permit certain beneficial owners resident in Liechtenstein to benefit from the EEA tax treatment if they fulfil all the requirements.
Note: The special EEA rates for corporations (18.38%) and individuals (21%) are currently only relevant for beneficial owners resident in Cyprus or in Liechtenstein; all applicable tax treaty rates between Finland and other EEA countries are lower than these.
Customers are reminded that relief from withholding tax at source is not available but a reclaim of the relevant amount is available through Clearstream Banking1 by means of a standard refund.
Further information
The Clearstream Banking Market Taxation Guide - Finland will be updated in due course to reflect the above 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.
1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in the Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500 (CBF) and Clearstream Banking, société anonyme, 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).
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