Iceland: Standard refund procedure available for dividends
Further to our Announcement A12091, dated 2 May 2012, and effective
immediately
a standard refund procedure is available for reclaim of tax withheld at source by the issuer on dividend payments.
Background
The full dividend distribution is subject to Icelandic withholding tax at a standard rate of 20% (18% for foreign legal entities). Withholding and reporting responsibilities do not rest on Clearstream Banking1 but on the issuer distributing the dividend and a relief at source is currently not available.
Standard refund procedure
Who can apply for a standard refund?
Beneficial owners who are eligible to receive Icelandic dividend payments at a reduced tax rate can apply for a standard refund. Iceland has signed a number of Double Taxation Treaties (DTTs) that provide for partial tax relief; a list is provided in the zip file attached to this Announcement.
Documentation requirements
To obtain a standard refund, customers must send us the following documentation, in the original, per reclaim application:
- Form RSK 5.42 Application under Double Taxation Conventions for an Exemption from Icelandic Taxation2. A version of this form is provided (for information purposes only) in the zip file attached to this Announcement. Only the page designated “for the Icelandic Tax Authorities” is to be sent to us.
To ensure that we remain in the process flow, please enter IcelandTax@clearstream.com (our email address) in field 7 and tick “e-mail” in field 19. We will then be notified of the acceptance of the treaty rate and inform you accordingly. In addition, please note that fields 6 and 11 are mandatory.
Form RSK 5.42 must be dated and signed by the beneficial owner or by its legal representative under power of attorney. It must be dated, signed and stamped by the beneficial owner’s local tax authority.
If the refund is granted, the Form RSK 5.42 is valid for five years, during which period it does not have to be included with any further reclaim application. - Form RSK 5.43 Application under Double Taxation Conventions for a Refund of Taxes Paid3. A version of this form is provided (for information purposes only) in the zip file attached to this Announcement. Only the page designated “for the Icelandic Tax Authorities” is to be sent to us.
One Form RSK 5.43 must be provided per ISIN code.
To ensure that we remain in the process flow, please enter IcelandTax@clearstream.com (our email address) in field 7 and tick “e-mail” in field 25. We will then be notified of the acceptance of the reclaim application and inform you accordingly. In addition, please leave blank the payment details in fields 17 to 23: we will enter our details so that payment will be forwarded to you through us (as is customary for refunds in other markets).
Form RSK 5.43 must be dated and signed by the beneficial owner or by its legal representative under power of attorney. - Power of Attorney, if the reclaim forms are completed by a third party on behalf of the beneficial owner. A version of this form is provided in the zip file attached to this Announcement.
- Credit Advice. The full chain of credit advices from the final beneficial owner to Clearstream Banking must be provided. A template is provided (as an example) in the zip file attached to this Announcement.
- Letter of Request to Clearstream Banking for Refund of Icelandic Withholding Tax, per reclaim request. The reference of the tax refund must be left blank: the unique identification number will be added by us. A version of this form is provided in the zip file attached to this Announcement.
Statutory deadline
The statutory deadline for reclaiming withholding tax in the Icelandic market is four years after the date on which the tax was withheld.
The deadline by which Clearstream Banking must receive the documentation is at least two months before the statutory deadline. All standard refund applications received after this deadline will be processed by Clearstream Banking on a “best-efforts” basis. However, in such cases, Clearstream Banking will apply an extra charge and accepts no responsibility for forms that have not reached the Icelandic tax authorities by the date considered as being the statute of limitations deadline.
With respect to tax reclaims in general, customers are reminded that Clearstream Banking accepts no responsibility for their acceptance or non-acceptance by the tax authorities of the respective country. It is the customer's responsibility to determine any entitlement to a refund of tax withheld, to complete the forms required correctly and to calculate the amount due.
Further information
For further information, please 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 your 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).
2. Available from the website of the Icelandic Tax Authorities: www.rsk.is/ws/cm/file/rsk_0542.en.pdf.
3. Available from the website of the Icelandic Tax Authorities: www.rsk.is/ws/cm/file/rsk_0543.en.pdf.