Standard refund - eligibility, documentation, deadlines - Lithuanian investment funds
Who can apply for a standard refund?
A standard refund of withholding tax on income from Lithuanian investment fund positions is available if the non-resident beneficial owner qualifies for a reduced rate in accordance with:
- the Double Taxation Treaty (DTT) between their country of residence and Lithuania, or
- Lithuanian domestic legislation, as described below.
Investment fund positions
Eligible beneficial owners
Effective rate of tax after refund
Non-Lithuanian (both legal entities and individuals) registered or otherwise established in any country with which Lithuania has an effective DTT in place
Tax treaty rate or 15%, whichever is lower
EU pension fundsc
Non-Lithuanian legal entities that hold 10% or more of the voting shares of its subsidiary for an uninterrupted period of at least 12 months, including the moment of the distribution of dividends, except in cases where the entity paying dividends is registered in a tax haven;
a. Expressed as a percentage of the gross dividend amount.
b. Amount of relief will be 0% if the DTT rate exceeds 27%.
c. An EU pension fund is considered a fund that is not recognised as a legal entity and established to facilitate and organise the investment of natural persons' retirement funds. The pension fund is a common asset pool meant to generate stable growth over the long term and provide pensions for natural persons when they reach the end of their working years and commence retirement. The assets of the fund are managed by a pension fund management company according the fund's rules.
To apply for a standard refund of withholding tax on income from Lithuanian investment fund positions, the following documents must be submitted to LuxCSD:
- Letter of Request to LuxCSD for Reclaim of Lithuanian Withholding Tax
- DAS-2 Official Claim Form
- Certificate of residence (if applicable)
- Power of Attorney in favour of Nasdaq CSD SE Lithuanian Branch
- Power of Attorney
- Credit advice
Statutory deadline for reclaiming withholding tax
The statutory deadline for reclaiming withholding tax using the standard procedure is five years after the relevant income payment for which tax reclaim is to be made, unless the DTT in place specifies a different deadline; for example, the DTT between Luxembourg and Lithuania defines a deadline of three years.
Clearstream deadline for standard refund applications
The deadline by which LuxCSD must receive the documentation for a standard refund application is, at the latest, two months before the statutory deadline. All standard refund applications received after this deadline will be processed by LuxCSD on a “best-efforts” basis. However, in such cases, LuxCSD will apply an extra charge and accepts no responsibility for forms that have not reached the Lithuanian Tax Authorities by the date considered being the statute of limitations deadline.
For tax reclaims, you are reminded that LuxCSD accepts no responsibility for their acceptance or rejection by the tax authorities of the respective country. It is the customer’s responsibility to determine any entitlement to a refund, to complete the forms required correctly and to calculate the amount due.
When are refunds received?
The estimated time for receiving a refund is four months from the date on which LuxCSD receives the certified documents, although this can vary depending on when the application is filed, and the complexity of the information supplied in the reclaim form.