Portugal: Certification requirements for EU/EEA pension funds - update
Further to Announcement A12056 of Clearstream Banking1, dated 13 March 2012, and effective
immediately
we hereby provide LuxCSD customers with further clarification on this matter.
Background
Following the judgment of the European Court of Justice in the case of the Commission versus Portugal dated 6 October 2011 (C-493/09), the Portuguese State Budget Law 2012 grants tax exemption on income from Portuguese securities paid to pension funds domiciled in other EU/EEA countries2, provided that the pension fund satisfies the following conditions:
| 1. | It grants exclusively the payment of retirement benefits (including pre-retirement or anticipated retirement), post-employment health benefits and, when provided on an ancillary basis, payment on death; |
| 2. | It is managed by institutions performing Pension Plan Schemes under Directive 2003/41/EC of the European Parliament and the Council of 3 June 2003; |
| 3. | It is the final beneficiary of the income; and |
| 4. | In the case of dividends, it has previously held the securities uninterruptedly for a period of at least 12 months. |
Conditions 1, 2 and 3 above must be confirmed to the Withholding Tax Agent / Portuguese Tax Authorities (PTA) through a declaration issued by the relevant supervisory authority of the EU/EEA Member-State.
Concerning condition 4, the State Budget Law does not specify in which way the holding period must be confirmed. For this reason, our local depository has obtained further clarification on this matter from the PTA.
Impact on customers
Regarding the 12-month uninterrupted period of holding (condition 4 above), the PTA has clarified to our local depository that confirmation of this condition must be made through a declaration issued by the bank where the EU /EEA pension fund has the direct account (per income payment).
We remind customers that, in order to benefit from tax exemption on Portuguese dividends at source or via quick refund, EU/EEA pension funds must satisfy all four of the above-mentioned conditions.
Details of the documentation and deadline for relief at source and quick refund of withholding tax on Portuguese dividends are published in our Announcement A12056 dated 13 March 2012.
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 your Customer Service or 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. To the extent that the respective EEA country is in a relationship of administrative cooperation with Portugal as regards tax matters, equivalent to that established between the EU Member States.
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