Denmark: Reduced dividend tax rates for non-residents. 1 April 2008

Transcription

1 Announcement Tax A May 2008 Denmark: Reduced dividend tax rates for non-residents Effective 1 April 2008 the Danish Parliament has adopted an amendment to reduce the tax rate on dividends, for certain nonresident beneficial owners, from 28% to 15%. The reduced rate brings Danish tax legislation into line with European Union (EU) law and will be applicable in the following circumstances: The beneficial owner holds no more than 10% of the company that is distributing the dividend; and The beneficial owner is resident in the EU or in a country whose local tax authorities exchange information with the Danish Tax Authorities according to Double Taxation Treaties (DTTs) or other international treaties or conventions. Note: Beneficial owners that reside outside the EU cannot, together with group connected companies, own more than 10% of the capital of the company that is distributing the dividend. Impact on customers Beneficial owners will continue to be subject to the 28% standard rate of withholding tax at source. Those whose circumstances meet the specific requirements mentioned above must apply for a refund of the 13% difference between the standard rate withheld and the new reduced rate for which they qualify. Note: Beneficial owners may be entitled to more beneficial reductions according to their specific DTT. We continue to monitor the situation and will provide further details if the refund procedure changes. Further information We will update our Customer Tax Guide (Denmark), which you can find at under Publications & Downloads / Tax Information / By Market, to reflect the new details in due course. For further information, please contact our Tax Help Desk: Luxembourg Frankfurt tax@clearstream.com tax@clearstream.com Telephone: (0) Fax: (0) or Clearstream Banking Customer Service or your Relationship Officer. For more general information regarding our products and services, please visit 26 May 2008 A08081 (1)

2 Announcement Tax A08095 Denmark: Treaty exemption for qualifying U.S. pension funds A new protocol to the Double Taxation Treaty (DTT) between Denmark and the United States of America has entered into force. As of 1 February 2008, qualifying U.S. pension funds are entitled to an exemption from withholding tax applied on Danish dividends. Qualifying pension fund Article 10 (Dividends) of the treaty provides an exemption from tax on dividends paid to a beneficial owner that is a qualifying pension fund : Article 4 (Residence) defines the term pension fund as follows: A legal person organized under the laws of a Contracting State and that is generally exempt from tax in that State and is established and maintained in that State either to provide pensions or other similar benefits to employees, including self-employed individuals, pursuant to a plan. Article 22 (Limitations of Benefits (LOB)) stipulates that a tax-exempt pension fund that is a resident of the U.S.A. shall qualify for entitlement to the benefits of the treaty if more than 50% of its beneficiaries, members or participants are individuals who are residents of the U.S.A. Impact on customers U.S. pension funds are initially subject to the statutory withholding tax rate (currently 28%) on their receipts of dividend distributions. Obtaining a free card to be able to apply for a refund For the U.S. pension fund to be able to request a full refund of Danish withholding tax, it must submit the following documentation directly to the Danish Tax Authorities to obtain a free card ( frikort ): Claim of Tax Treaty Benefits (see Appendix 1 on page 2), in which the U.S. pension fund certifies that it meets all the conditions as specified in the DTT; and Internal Revenue Service (IRS) Form 6166, U.S. Residency Certification Letter, confirming that the U.S. pension fund has filed a U.S. income tax return. The frikort is valid for 10 years from the date of issuance. Applying for a refund To apply for a refund of withholding tax, the U.S. pension fund must complete and submit the following documentation to Clearstream Banking: Claim to Relief from Danish Dividend Tax (Form ), available for electronic completion on the web site of the Danish Tax Authorities at A copy of Form is provided in Appendix 2 on page 4 for information purposes. Copy of the frikort. Power of Attorney (see Appendix 3 on page 5), if the customer or a third party is completing the form on behalf of the beneficial owner. Credit Advice that identifies the dividend payment details and that must reconcile with the information in the refund form. If the beneficial owner is the customer s client, the Credit Advice from the customer to the beneficial owner must be provided. Letter of Request to Clearstream Banking for Reclaim of Danish Withholding Tax (see Appendix 4 on page 6). A08095 (1)

3 Statutory deadline The statutory deadline for reclaiming withholding tax is three years after the date on which the dividend was distributed. 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. It is the customer's responsibility to determine any entitlement to a refund of tax withheld, to complete the forms required correctly and to calculate the amount due. Please refer to the Customer Tax Guide Denmark for further information about the general reclaim procedure. Further information We will update our Customer Tax Guide (Denmark), which you can find at under Publications & Downloads / Tax Information / By Market, to reflect the new details in due course. For further information, please contact our Tax Help Desk: Luxembourg Frankfurt tax@clearstream.com tax@clearstream.com Telephone: (0) Fax: (0) or Clearstream Banking Customer Service or your Relationship Officer. For more general information regarding our products and services, please visit Appendix 1. Claim of Tax Treaty Benefits A copy of the SKAT Claim of Tax Treaty Benefits form is presented for your use on the following page. A08095 (2)

4 Forward this form to: Skattecenter Ballerup Att.: Udbytte Lautrupvang 1A 2750 Ballerup Denmark Claim of Tax Treaty Benefits Identification of Beneficial Owner Name of the pension fund (beneficial owner) Permanent residence address U.S. taxpayer identification number Danish identification number, if any The above mentioned pension fund certify that the fund is a resident of the United States within the meaning of the income tax treaty between Denmark and the United States. The U.S. Form 6166 must be enclosed; and the fund is the beneficial owner of the shares; and the Danish dividends are not derived from the carrying on of a business by the pension fund or through an associated enterprise; and the fund is organized under the laws of the United States to provide a pension or other similar benefits to employees, including self-employed individuals, pursuant to a plan; and more than 50 percent of the pension fund s beneficiaries, members or participants are individuals resident in the United States; and the fund will immediately notify the Danish tax administration in case the circumstances cease to apply. Sign Here.... Signature of individual authorized to sign for beneficial owner Date (DD-MM-YYYY) Capacity in which acting J.nr Dok

5 Appendix 2. Claim to Relief from Danish Dividend Tax (for information purposes only) Claim to Relief from Danish Dividend Tax In my capacity as beneficial owner On behalf of the beneficial owner Claim is made for refund of Danish dividend tax, in total DKK: Beneficial Owner Full name Full address Signature Beneficial owner/applicant As documentation is enclosed dividend advice(s), number: If the claim is made on behalf of the beneficial owner the applicant s power of attorney shall be enclosed (This documentation is obligatory) Financial institution The amount is requested to be paid to: Name and address Reg. no Account no SWIFT BLZ IBAN Certification of the competent authority It is hereby certified that the beneficial owner is covered by the Double Taxation Convention concluded between Denmark and Date Official stamp and signature (gl.nr. U 20x) When signed to be forwarded to: Skattecenter Ballerup Postboks 59 DK-2750 Ballerup A08095 (4)

6 Appendix 3. Power of Attorney Date: I/We, the undersigned, of, make, constitute and appoint, of, my (our) true and lawful attorney-in-fact in my (our) name, place and stead, on my (our) behalf, and for my (our) use and benefit, to exercise or perform any act, power or duty, right or obligation whatsoever that I (we) now have, or may subsequently acquire with respect to the reclaim of tax withheld on investment income in respect of debt and equity securities. The rights, powers, and authority of attorney-in-fact granted shall commence and be in full force and effect immediately upon the execution of this instrument. Such rights, powers and authority shall remain in force and effect thereafter until revoked by me (us) in writing. Yours faithfully,. Authorised Signature Authorised Signature Name Name Title Title Place Date A08095 (5)

7 Appendix 4. Letter of Request to Clearstream Banking for Reclaim of Danish Withholding Tax Clearstream Banking ATT: Department CID Neue Börsenstrasse 1 D Frankfurt am Main Germany Date: Account: Dear Sir/Madam: We refer to the following dividend payment on the following security: Type of security (bearer share, registered share): Issuer of the security: Security code (ISIN or Common Code): Dividend payment date: Our Clearstream Banking account, number, was credited with the above dividend under deduction of 28% Danish withholding tax, on the following quantity of securities beneficially owned by the following beneficial owner: Name of beneficial owner: Residence of beneficial owner (full address): Quantity of securities: Total dividend amount received, net of withholding tax: We hereby request that Clearstream Banking forward our application to the Danish Tax Authorities for a refund of DKK of withholding tax, to which the beneficial owner is entitled by virtue of: The Double Taxation Treaty between Denmark and ; or The domestic exemption for recognised Foreign Governments and International Organisations. A08095 (6)

8 Please credit the withholding tax refunded to the above Clearstream Banking account, with reference, upon receipt from the Danish Tax Authorities. Yours faithfully,. Authorised Signature Authorised Signature Name Name Title Title Place Date We attach: The completed and signed generic form , or a country-specific form, or a Request for Refund as a Foreign Government or International Organisation And other documentation as required by the Clearstream Banking procedure. A08095 (7)

9 Announcement Tax A October 2008 Denmark: New statutory limitation and reminder of tax reclaim deadline The general statutory deadline for reclaiming withholding tax on dividends on Danish equities has been reduced from 20 years to three years, calculated from the original payment date of the dividend. The new deadline affects all payments made in Reclaims related to before 1 January 2008 (that have not expired earlier under the old statute of limitations) can be filed until 31 December Exceptions to the new statutory limitation Double taxation treaties between the following countries and Denmark stipulate different statutory limitations from the general statutory deadline, as indicated: Germany 4 years from the end of the calendar year in which the dividend was distributed. Netherlands 3 years from the end of the calendar year in which the dividend was distributed. Switzerland 3 years from the end of the calendar year in which the dividend was distributed. Deadline for the submission of tax reclaim documentation The deadline by which Clearstream Banking must receive the required reclaim documentation is, at the latest, two months before the statutory deadline. We will process all standard refund applications received after this deadline on a best-efforts basis. However, in such cases, we will apply an extra charge and accept no responsibility for forms that have not reached the Danish Tax Authorities by the date considered to be the statute of limitations deadline. Note: 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. It is the customer's responsibility to determine any entitlement to a refund of tax withheld, to complete the forms required correctly and to calculate the amount due. Further information We will update our Customer Tax Guide (Denmark), which you can find at under Publications & Downloads / Tax Information / By Market, to reflect the new details in due course. For further information, please contact our Tax Help Desk: Luxembourg Frankfurt tax@clearstream.com tax@clearstream.com Telephone: (0) Fax: (0) or Clearstream Banking Customer Service or your Relationship Officer. For more general information regarding our products and services, please visit 10 October 2008 A08175 (1)

10 Announcement Tax A June 2009 Denmark: Tax reform approved Note: This revised version supersedes the version published on 8 June 2009 and highlights a correction with regard to the effective date. Further to our Taxflash T09019, dated 27 March 2009, concerning the draft bill of the 2009 budget, the tax reform was approved, with adjustments, by the Danish Parliament in its assembly of 28 May The tax reform confirms that, as of 1 January 2012, the withholding tax on dividends will be reduced from 28% to 27%. Further information For further information, please contact our Tax Help Desk: Luxembourg Frankfurt tax@clearstream.com tax@clearstream.com Telephone: (0) Fax: (0) or Clearstream Banking Customer Service or your Relationship Officer. For more general information regarding our products and services, please visit 15 June 2009 A09082-rev (1)