Applicable to interest from Portuguese domestic debt securities paid as of

4 December 2012

the following changes to the current tax procedure will be effective:

• New Standing Instruction for use by customers whose total holding in Portuguese domestic debt securities is for themselves only or is held exclusively on behalf of one single beneficial owner;
  
• New Standing Instruction to be used by customers:
  

• Who are recognised by Portugal as a supranational organisation and whose total holding in Portuguese domestic debt securities is for themselves only; or
  
• Whose total holding in Portuguese domestic debt securities is held on behalf of one single beneficial owner that is a supranational organisation recognised by Portugal;

• 
  
• Withdrawal of the full standard tax reclaim procedure.

Standing Instruction for Own/Single Beneficial Owner Assets

In addition to the Portuguese Debt Securities - One-Time Declaration of Beneficial Ownership, giving the right to the customer to hold such securities with Clearstream Banking¹, the Standing Instruction for Own/Single Beneficial Owner Assets attached below must be submitted when the customer’s total holding in Portuguese domestic debt securities is held:

• For itself only (own assets); or
• Otherwise exclusively on behalf of one single beneficial owner.

The original form, duly completed and signed, must be provided once, before the first related interest payment and remains valid until revoked. Based on this form, Clearstream Banking will consider by default the entire position of the customer in the respective account as being exempt from Portuguese withholding tax.

The Statement for Exemption from Portuguese Withholding Tax on Income from Debt Securities, duly completed and signed by the customer, must be provided on an annual basis and must be dated during the year of application.

Deadlines:

• Standing Instruction: at the latest by 10:00 CET two business days before the record date of first interest payment.
• Annual Statement of Exemption: at the latest by 15 January of the year of application.

Standing Instruction for Supranational Organisations

In addition to the Portuguese Debt Securities - One-Time Declaration of Beneficial Ownership, giving the right to customers to hold such securities with Clearstream Banking, the Standing Instruction for Supranational Organisations attached below must be submitted when:

• The customer is a supranational organisation recognised by Portugal whose total holding in Portuguese domestic debt securities is held for itself only (own assets); or
  
• The customer’s total holding in Portuguese domestic debt securities is held exclusively on behalf of one single beneficial owner that is a supranational organisation recognised by Portugal.

The original form, duly completed and signed, must be provided once, before the first related interest payment, and remains valid until revoked. Based on this form, Clearstream Banking will consider by default the entire position of the customer in the respective account as being exempt from Portuguese withholding tax. No further action is required from the customer to ensure exemption from tax.

Important notes:

The Articles of the treaty signed between the supranational organisation and Portugal must be completed. Without such information, the Standing Instruction is not valid.

The Statement for Exemption from Portuguese Withholding Tax on Income from Debt Securities (the so-called Annual Statement) should not be provided.

Deadline:

• Standing Instruction: at the latest by 10:00 CET two business days before the record date of the first interest payment.

Full standard tax reclaim

Background

In our Announcement L12045, dated 12 September 2012, we explained that the interpretation of the Portuguese legislation applicable for a full standard refund of withholding tax is not consistent between the Portuguese Tax Authorities (PTA) and local custodians, including Clearstream Banking’s depository, Banco Santander Totta (BST).

According to the information we could retrieve, the potential discrepancies are linked to the following:

• Different statutory deadlines for filing tax reclaim applications
  

• According to BST, the applicable statutory deadline falls within the scope of Decree Law 193/2005 and is two years from the end of the year in which the tax payment was made to the PTA.
  
• According to the PTA, the applicable statutory deadline falls within the scope of the Portuguese Income Tax Code and is two years from the date on which the tax payment was made to the PTA.

• 
  
• Calculation of entitlement to reclaim
  

• The PTA may consider, in their calculation of the entitlement to reclaim, the accrued interest period for the reclaiming beneficial owner (as indicated in its tax reclaim form). Thus, the beneficial owner may recover the tax amount linked to the effective period of holding, even if at source the tax has been calculated on the entire period between two coupons.

• 
  
• Additional tax documentation required by the PTA
  

• For example, the full chain of Credit Advices, special Power of Attorney etc.

The full standard reclaim procedure, published and used by Clearstream Banking between September 2010 and today, is based on the interpretation of applicable legislation by local legal advisors’ and confirmed by BST (being withholding agent for Portuguese domestic debt securities).

Taking into consideration the above discrepancies and in order to safeguard the interests of our customers, Clearstream Banking took the decision to suspend the standard refund service on interest from Portuguese domestic debt securities as of the date of publication of this Announcement.

This suspension will remain in place until the PTA and market participants clarify the inconsistencies mentioned above. Customers are strongly recommended to certify their accounts for obtaining tax exemption at source or via the quick refund.

We remind customers that the quick refund deadline is 80 calendar days after the respective payment date, which offers a substantial period of time in which to inform final beneficial owners and obtain the required certification.

Note: The full standard refund service will continue for all interest payments made until now for which the statutory deadline is still valid.

Impact on customers

For interest payments made on/after 4 December 2012

Standard refund on Portuguese domestic debt securities is no longer available through Clearstream Banking.

For interest payments made before 4 December 2012

Full standard refund is still available under the following conditions:

Final beneficial owners are eligible to apply for a full standard refund if they are non-residents of Portugal and:

• Residents of a country or territory not considered as a tax haven under Portuguese legislation, including institutions of which no more than 20% is owned by entities resident in Portugal; or
• Central banks or government agencies (regardless the residency).

Customers must provide Clearstream Banking with the following original documents per standard reclaim request:

• Letter of Request to Clearstream Banking for Reclaim of Portuguese Withholding Tax withheld on Portuguese Debt Securities (Decree-Law 193/2005)

and

• Full chain of Credit Advices, identifying interest payment details including the security type, gross amount of payment, date of payment and amount of tax withheld.

A Credit Advice is required from each intermediary financial institution between the beneficial owner and Clearstream Banking. For example, if the only intermediary financial institution between Clearstream Banking and the beneficial owner of the interest is the Clearstream Banking customer himself, then both a Clearstream Banking Credit Advice and a Credit Advice issued by the customer are required.

and

• Special Power of Attorney from final beneficial owner to BST

This will enable BST to contact the PTA on behalf of the beneficial owner and follow up the status of the reclaim application. The template attached at the end of this Announcement must be used; it must be provided once, duly completed, signed and notarised, and remains valid until revoked.

and

• Power of Attorney from final beneficial owner to his representative

This must be provided if the Modelo 22-RFI mentioned below has been completed on behalf of the beneficiary by the legal representative.

and either

• Modelo 22-RFI completed by the beneficial owner (or its legal representative under a Power of Attorney) and by the beneficial owner’s tax authorities. In such a case, a Cover Letter indicating that the beneficial owner is applying for a full refund and not for the treaty tax rate must also be provided.

The official form can be found on the website of the PTA.

or

• Modelo 22-RFI not completed by the beneficial owner’s local tax authorities but completed by the beneficial owner (or its legal representative under a power of attorney) as follows:
  

• The top part, mentioning the application of a Double Taxation Treaty (DTT), must be left blank.
• Boxes I, II, V, VIII and IX must be filled.
• The remaining boxes must be left empty; they will be filled in by ourselves or by our Portuguese custodian.

In such a case, a Proof of Residence must also be provided depending upon the status of the beneficial owner, as follows:

a) If the beneficial owner is a financial institution, pension fund or insurance company resident in a member country of the Organisation for Economic Co-operation and Development (OECD) or in a country that has a DTT in place with Portugal:

• A certificate from the entity responsible for registration or supervision of the financial institution, certifying the legal existence of the holder and its residence; or
• One of the forms of proof listed under d) below.

b) If the beneficial owner is a central bank or a government agency that integrates central public or regional administrators or peripheral, indirect or state-related administration in an OECD country or in a country that has a DTT in place with Portugal or an international body:

• A declaration of its legal status, duly signed and authenticated.

c) If the beneficial owner is a collective investment vehicle (CIV), such as an investment fund, resident in an OECD country or in a country that has a DTT in place with Portugal:

• A statement issued by the pubic entity responsible for registering or supervision of such entities by the tax authorities, in either case certifying the legal existence of such entity, the law under which it was incorporated and the place it is domiciled; or
• One of the forms of proof listed under d) below.

d) In all other cases, one of the following is accepted as proof of residence:

• A Certificate of Residence or an equivalent document issued by the tax authorities; or
• A document issued by the Portuguese consulate as proof of residence abroad; or
• A document, issued specifically to certify residency, that must be issued by an official entity that forms part of the central public or regional administrations of the country of residence.

The Proof of Residence must cover the interest payment date(s) and is valid for three years after the date of the signature (unless there are any changes to the underlying facts). The proof of exemption for a central bank or government agency is valid until revoked.

Deadline:

• Customers must send all standard reclaims of tax withheld on income from Portuguese securities at the latest three months before the end of the two years after the date on which the income was paid.
  
• All reclaim applications received by Clearstream Banking after above deadline will be rejected.

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.

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.

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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