South Korea: New disclosure requirements for Depository Receipt holders : Reminder
Further to our Announcement L12066, dated 30 October 2012, we hereby remind customers of Clearstream Banking1 that, effective
1 December 2012
changes implemented by the Korean Ministry of Strategy and Finance (MoSF) to the withholding tax relief process have come into force.
In order to benefit from the reduced rate of withholding tax provided for under the terms of a Double Taxation Treaty (DTT) with South Korea, all customers holding Korean American and Global Depository Receipts (ADRs and GDRs) are, from the above date, required to disclose the name, complete street address and personal identification (ID) number of each respective beneficial owner.
Personal identification (ID) number
The personal ID number to be provided depends on the beneficial owner’s country of residence, as follows:
- In jurisdictions such as the U.S.A., where a Taxpayer Identification Number (“TIN”), such as an SSN or EIN, is issued, the TIN is the number that must be provided as the personal ID number.
- For jurisdictions such as Japan, where TINs are not issued, a valid personal ID number must be used in place of a TIN.
For these jurisdictions, valid personal ID numbers include, but are not limited to, (for individuals) date of birth, passport number, driving licence number, and (for entities) resident registration number and date of establishment or date of registration.
In addition, entities that have no legal or fiscal personality (such as partnerships, trusts, Regulated Investment Companies (RICs) and limited liability companies, with the exception of incorporated funds - for example, Mutual Funds, Pension Funds) are, from the above date, required to disclose their underlying beneficial owners.
Entitlement basis
Entitlement to benefits under a DTT is determined based on the entitlement of the beneficial owners.
For example, a partnership will no longer be able to claim benefits on its own behalf; treaty benefits are determined based on the eligibility of each underlying member. To claim a reduced rate of withholding tax, the partnership must provide the name, complete street address, and personal ID number of each underlying member.
The following important points should be noted:
- For any holder who does not provide the required underlying information, or if the same address and/or personal ID number are improperly used for multiple beneficial owners, the statutory rate of withholding (currently 22%) is applied.
- The new tax laws do not impact the reclaim process with regard to ADRs and GDRs for dividend events with record dates at the end of June 2012.
- The maximum withholding tax rate (currently 22%) is applied to any claimant for whom this information either has not been provided within the deadline or is incomplete or inaccurate.
Submission of information to Clearstream
The list of beneficial owners must be submitted, in the specific Excel spreadsheet (attached), via the Upload BO List facility on our website at http://www.clearstream.com/ under / Asset Services / Tax Services / Upload BO List / Beneficial Owner List / South Korea / South Korean Depository Receipts, followed by the completion of step 3, 4 and 5.
The following important points should be noted:
- Customer submissions that do not use the Excel spreadsheet format as attached will be rejected. The customer must complete the spreadsheet file and use the online upload facility to submit it.
- Files submitted by email will be disregarded.
- The deadline by which the customer must provide us with the aforementioned beneficial owner details will be published as a pre-notification per event.
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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