Spain: Tax exemption available for Swiss pension funds/plans
With retroactive effect as of
24 August 2013
beneficial owners that are Swiss pension funds or plans may recover the full tax amount withheld at source.
Background
A new Double Taxation Treaty (DTT) protocol signed between Spain and Switzerland amends the current tax refund possibilities on dividend payments made to Swiss pension funds/plans.
According to article 5 of the aforementioned protocol, a pension fund/plan resident in Switzerland has, from 24 August 2013, the right to be exempt from tax on dividends paid from Spanish equities.
Impact on customers
Note: Swiss pension funds/plans can recover the total tax withheld at source via the quick/standard refund procedures based on the fact that the exemption is granted by the DTT and not by Spanish domestic law. Customers are reminded that EU/EEA pension funds or Collective Investment Vehicles (CIVs) cannot obtain the respective 0% and 1% tax rates through the quick refund procedure as they must file their reclaim applications with the Spanish Tax Authorities.
Quick refund
If the beneficial owner is a Swiss pension fund/plan, the following documentation must be submitted to Clearstream Banking1 at the latest on the second business day of the month following the month in which the dividend payment was made, by 10:00 CET:
- A One-Time Certificate for Spanish Equities for the first quick refund application (if not already provided), completed and duly signed by the Clearstream Banking customer; and
- A List of Beneficial Owners for each quick refund application, completed, per account and security, by the customer with the name, address for tax purposes, the applicable rate of withholding tax, the nominal holding and the net tax amount to be refunded for each final beneficial owner for whom a quick refund is required; and
- A “Petición de Reducción/Devolución” issued by the Swiss Tax Authorities, available from the Spanish Tax Authorities or from the customer’s local tax authority, completed by or on behalf of the beneficial owner and its local tax authorities; and
- A Power of Attorney (if the customer or a third party is completing the “Petición de Reducción” on behalf of the beneficial owner).
Standard refund
If the beneficial owner is a Swiss pension fund/plan and did not apply for quick refund, the following documentation must be submitted to Clearstream Banking at the latest three months before the statutory deadline, which is four years following the dividend payment date:
- A one-time Power of Attorney, granting:
- Either to Clearstream Banking, the right to process the reclaim with, and to collect the taxes from, the Spanish Tax Authorities on behalf of the final beneficial owner. This Power of Attorney does not need to be notarised or apostilled.
- Or to BBVA, the right to process the reclaim with, and collect the taxes withheld in excess from, the Spanish Tax Authorities and issuing companies on behalf of the final beneficial owner. This Power of Attorney must be notarised and apostilled according to the Hague Convention of 5 October 1961.
- A “Petición de Reducción/Devolución” issued by Swiss Tax Authorities available from the Spanish Tax Authorities or from the customer’s local tax authority, completed by or on behalf of the beneficial owner and its local tax authorities.
- Tax breakdown of refund applications in spreadsheet format.
- A Letter of Request to Clearstream Banking for Reclaim of Spanish Withholding Tax.
Mailing address
Customers are reminded that all tax certification requested for tax relief on Spanish dividends must be sent to:
Clearstream Operations Prague s.r.o.
Attn: PTR - Tax Services
Futurama Business Park Building B,
Sokolovska 662/136b
CZ-18600 Prague 8
Czech Republic
Further information
For further information, customers may contact the Clearstream Banking Tax Help Desk on:
| Luxembourg | Frankfurt | Singapore | |
| Email: | tax@clearstream.com | tax@clearstream.com | tax@clearstream.com |
| Telephone: | +352-243-32835 | +49-(0) 69-2 11-1 3821 | +65-6597-1665 |
| 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 S.A., 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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