Belgium: Dividends - new documentation requirements for full refund by foreign companies holding a "qualifying" participation
Following announcements A18036 and L18017, Clearstream Banking1 informs customers of the new documentation requirements to obtain a full refund on dividends paid as of 1 January 2018 following the European “Tate & Lyle” case.
eligible foreign companies holding a “qualifying” participation may obtain full refund by following the below updated procedure.
Since the beginning of 2016, a reduced withholding tax rate of 1.6995% on dividends has been granted to foreign investors fulfilling the eligibility criteria set out in Article 269/1 of the Belgian Income Tax Code.
As of 1 January 2018, new fiscal measures including the repeal of the 1.6995% rate became effective. With the new laws, the dividend received deduction (DRD) applied on qualifying dividends received by Belgian parent companies from subsidiaries, increased from 95% to 100%. Consequently, the withholding tax rate of 1.6995% is no longer applicable, and dividends received by non-resident parent companies are fully exempt.
Following the publication of this full exemption possibility, Clearstream Banking published the appropriate procedure and the documentation requirements.
However, recently Clearstream received a request from the BTA to provide additional documentation for standard refund.
Impact on customers
Eligible foreign companies wishing to obtain a full refund of tax on dividends paid as of 1 January 2018 must ensure that they provide the following documentation within the prescribed deadlines:
- A Letter of request to Clearstream Banking for Reclaim of Belgian Withholding tax authorises Clearstream Banking to reclaim withholding tax from the Belgian Tax Authorities on the customer’s behalf.
- A Self-declaration for exemption of dividend withholding tax art. 264/1 must be submitted by foreign parent companies with minority participation to benefit from the full exemption under art.264/1 and must be completed, signed and stamped by the legal representative of the organisation.
- An Attestation number 1 Tate & Lyle (attest nummer 1 T&L)
This attestation must be duly completed and signed by the tax authorities of the country of residence of the beneficiary. This attestation can be replaced by a document established by the foreign fiscal authorities as long as it contains the same information. Any refund already obtained by the beneficiary in its country of residence must be mentioned on the document, including the amount refunded. It is important to join to this declaration an annex listing all the dividend payments for which the exemption is requested. This annex must also be certified by the foreign tax authorities.
- An Attestation number 3 Aber (attest nummer 3 Aber)
Self-declaration of the beneficiary of the dividends certifying:
- The full ownership of the assets producing the income at the time of the allocation or dividend payment;
- The allocation or payment of the dividends concerned has not caused any reduction or loss in value;
- No other request for reduction/exemption of withholding tax on movable property has been filed in any form.
- The full chain of Credit advices testifying the amount of dividends received (gross amount, withholding tax rate, date and tax withheld).
- A Bank statement of the beneficial owner of the income testifying the net amount of dividends received.
- Any document proving the investment value and the holding period for example, statement of transactions or attestation from the financial institution who operated the transaction and containing the details of the purchase/sale/lending transactions.
- An attestation of holding from the custodian specifying the holding period of the actions concerned.
- Full chain of Power of Attorney enabling each entity in the custody chain to file the reclaim on behalf of the beneficiary (when the reclaim is not signed by the beneficiary of the income).
The deadline by which the above documentation must be provided is at the latest two months before the relevant statutory deadline.
For further details please refer to our Market Taxation Guide – Belgium.
For further information, please contact the Clearstream Banking Tax Help Desk or Clearstream Banking Client Services or your Relationship Officer.
1. Clearstream Banking refers collectively to 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, and 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.