Poland: Standing instruction on debt securities positions and validity of tax certificates
Effective
immediately
tax procedure with regard to Polish securities is changed as follows:
- Customers of Clearstream Banking1 can segregate their accounts in order to obtain a 19% standard withholding tax rate on interest and redemptions paid to individual beneficial owners of Polish debt securities; and
- The validity of various tax certificates (as listed below) is amended from unlimited to one year.
Securing the lower rate for individual beneficial owners
As explained in our Announcement A12087, dated 24 April 2012, all Polish assets eligible in Clearstream Banking are deposited on our omnibus account with Bank Handlowy w Warszawie SA (Bank Handlowy), our depository in Poland. The omnibus account is flagged at the maximum tax rate for undisclosed positions and undisclosed positions are considered by default as being held by beneficial owners that are legal/corporate entities.
According to Polish legislation, the following maximum standard rates are applicable for Polish debt securities on undisclosed positions:
- 20% for beneficial owners that are legal/corporate entities;
- 19% for beneficial owners that are physical persons (individuals).
Important note:
Based on feedback received from the local market, in order to secure the standard refund applications filed with the Polish Tax Authorities by beneficial owners who are individuals, customers must disclose, before each interest payment event, the total positions held by such beneficial owners.
Individual beneficial owners cannot apply for a standard refund through Clearstream Banking for undisclosed positions taxed at source at 20% and should contact their tax advisors to apply directly with the Polish Tax Authorities.
Customers have one of the three following possibilities to instruct the positions held by individual beneficial owners:
Standing instruction for 19% tax
Customers can open two accounts:
- One for the debt securities held exclusively by individual beneficial owners (“19% account”);
- One for the debt securities held by legal/corporate entities (“20% account”).
For the 19% account, customers should submit the Standing Instruction for Domestic Debt Securities - Individual Beneficial Owner (see attachment). The original, duly completed and signed, must be received by us by the relief at source deadline (at the latest four business days before the first interest/redemption record date by 10:00 CET). Based on this Standing Instruction, we will apply, by default, the 19% tax rate on all undisclosed positions.
Note: On both accounts, the normal relief at source procedure applies for the certified positions.
Split of positions
Customers that:
- Maintain a single omnibus account;
- Do not certify for a particular interest/redemption payment; and
- Want to secure the standard refund applications;
can send a SWIFT MT599 free-format message including:
- The total position held by individual beneficial owners; and
- The total position held by legal/corporate entities.
Based on such instruction, we will apply the respective 19% and 20% standard rates as appropriate.
Note: The SWIFT message must be received by us by the relief at source deadline (at the latest on the respective income/redemption record date by 10:00 CET). In the absence of the SWIFT message, we will apply, by default, the 20% standard rate for all undisclosed positions.
Certified and undisclosed holdings
Customers that maintain a single omnibus account and, for a particular interest/redemption payment:
- Have positions for which beneficial owners certify for relief at source;
- Have undisclosed holdings; and
- Want to secure the standard refund applications;
should ensure that, in the List of Beneficial Owners to be submitted to us in addition to the other required tax certification, the split of undisclosed holdings (included in the top of the List of Beneficial Owners) is completed.
| Undisclosed beneficiary breakdown - legal status | |
| * MANDATORY area for all undisclosed BOs | |
| Beneficial Owner Status | Securities holding |
| Legal person: | 0 |
| Natural person: | 0 |
| Total: | 0 |
If this table is not duly completed, we will apply, by default, the 20% standard rate for all undisclosed positions.
The List of Beneficial Owners must be received by us by the relief at source deadline (at the latest on the respective income/redemption record date by 10:00 CET).
Validity of tax certificates
We have been informed by Bank Handlowy that the various Polish tax offices and the Polish issuers may have different opinions on the validity of the tax certificates. Therefore, to have the safest approach, we consider, with immediate effect, that the following certificates must be renewed annually:
- Certificates of Residence;
- Specific Statements for banking entities;
- Investment Fund Statements;
- Pension Fund Statements.
These certificates are, from now on, considered valid if they are issued in the year in which the applicable income payment takes place.
Furthermore, we take this opportunity to clarify the validity of the “Declaration of not being engaged in a commercial activity in Poland”. This certificate, required for a standard refund application, is valid for the payments covered by the years2 as completed by the beneficial owner in the first paragraph.
We would also remind customers that, if new or additional certification is required by any particular issuer, we will inform customers immediately.
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 to 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. The details for more than one year may be completed in the same Declaration.
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