Switzerland: Changes of deadlines in the affidavit process for Swiss funds
Effective
1 July 2013
we have been informed by our local depository, UBS AG, that the deadlines for the submission of the forms related to the affidavit process for Swiss funds, along with other aspects of the process, will be adapted.
This is due to changes in market practice and, in cases of corrections to affidavit-eligible positions for non-UBS funds (third-party funds), customers will have to bear a possible currency risk and accept possible delays during the refund process.
Background and current process
In order to reclaim withholding tax on income payments, a Bank Declaration (Affidavit) is required for each income payment for each investment fund.
Currently, we send a notification to each customer receiving an income payment from a Swiss investment fund with the text of the Affidavit. The Clearstream Banking1 customer, being a designated bank, is required to complete the Affidavit where necessary and submit it to us, by agreed authenticated means of communication, for each payment.
In the Affidavit, the customer certifies that:
- The legal title to the income belonged to non-residents of Switzerland;
- It was holding the investment fund shares for safekeeping on behalf of the beneficial owners on the date of the payment and credited their accounts with the income; and
- It will, upon request at any time, submit supporting documentation.
Correspondingly, the Swiss bank paying the income from the Swiss investment fund requests its clients to sign a similar Affidavit, the texts of which are available in an Appendix to the Clearstream Banking Market Taxation Guide (Switzerland).
The withholding tax is credited immediately upon receipt of the Affidavit by the Swiss depository or paying agent. Our local depository absorbs any currency or refund risks, irrespective of when the Affidavit was submitted.
From 1 July 2013, UBS AG will offer this service for UBS funds only.
Process from 1 July 2013 onwards
The deadline for the submission of the Affidavit will be announced by the Swiss depository or paying agent on the paper notification and we will release a tax notification and process the Affidavits as follows:
- For Affidavits received before our local depository deadline (usually PD-1): as relief at source;
- When Affidavit eligibility information is published after payment date: as quick/standard refund.
For distributions/accumulations subject to Affidavit in currencies other than CHF, in cases where the Affidavit has been submitted after our local depository deadline, the customer will bear the currency risk.
The decision as to whether the refund will be paid in the original currency or in CHF will be taken by the Swiss paying agent, who must pay the withholding tax to the Swiss Tax Authority (ESTV) in CHF and therefore can only reclaim CHF from the ESTV.
An Affidavit submitted after the respective deadline will only be considered subject to the consent of the paying agent. The fact that the paying agent has to reclaim the withholding tax from the ESTV first can lead to delays in the refund process.
Note: Affidavits submitted via SWIFT MT599 (general affidavit) can benefit from more efficient and effective processing of the Affidavit instructions.
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 collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500 (CBF) and 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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