Clearstream Banking1 was informed by its local depository that the Polish CSD KDPW2 amended their process in relation to taxation applicable to income payments deriving from Polish Euro-denominated mortgage bonds.
Clearstream Banking informs clients that effective
immediately
any beneficial owner who – irrespective of its certification status – used to be paid gross on any income derived from its Polish Euro-denominated mortgage bonds, will be taxed at the highest applicable tax rate if its identity has not yet been disclosed to KDPW when the income payment is made.
Impact on clients
Clients who wish to apply for relief at source (RAS)/exemption at source on taxable Polish Euro-denominated mortgage bonds on behalf of a final beneficial owner can do so through a designated RAS/exemption at source procedure.
A quick refund procedure is not available through Clearstream Banking.
Eligible beneficial owners
Polish residents:
Individuals are subject to a taxation rate of 19%;
Legal entities are eligible to receive the income payment gross (0%).
Polish non-residents:
Individuals are eligible to receive the income payment gross (0%);
Legal entities are eligible to receive the income payment gross (0%).
Undisclosed beneficial owners will be subject to taxation at 20%.
Partially disclosed individual beneficial owners (not reflecting the resident vs non-resident split within the position) will be subject to taxation at 19%.
RAS/Exemption at source
To obtain RAS/exemption at source, clients must provide:
An original certificate of tax residence issued by the beneficial owner’s local tax authority in the relevant year. It must include the beneficial owner’s full name and address and remain valid until the end of the respective calendar year. Electronic certificates of tax residence are accepted. Please refer to announcement A18103 for further details.
Notarised and apostilled beneficial owner statements using either the “non-business entity” (individual) or the “business entity” (legal entity) template version.
A per-payment instruction sent via Swift (formatted MT565) or Xact Web Portal indicating:
Clearstream Banking client account number
ISIN code
Corporate ID
Total instructed securities quantity
Requested tax rate
And for each relevant BO, the following details in BENODET sequence:
Name of the entity (field :95V::OWND//)
Two letter ISO country code of entity’s country of fiscal residence (field :94C::DOMI//)
BO security quantity (field :36B::OWND//)
Deadlines
Exemption / Relief at source
Deadline for receipt by Clearstream Banking
Certificates and per-payment instructions
By 10:00 AM CET on the day which is 6 working days before the applicable payment date.
Clearstream Banking is currently monitoring with the Polish depository and will inform clients without undue delay upon receipt of any additional information regarding the new process applied by KDPW in relation to Polish Euro-denominated mortgage bonds.
Further information
For further information, please contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services or your Relationship Officer.
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1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG clients using Creation accounts), registered office at Mergenthalerallee 61, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.
2. "KDPW" stands for Krajowy Depozyt Papierów Wartościowych, which is a legal entity acting as central securities depository in Poland.
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