Tax Services: Tax instruction requirements - reminder
Clearstream Banking1 would like to remind customers, of the applicable tax instruction requirement, which must be followed, when submitting tax instructions for the purpose of obtaining relief at source or quick refund through Clearstream Banking.
Tax instruction media
Customers may submit tax instructions using the following media:
- Xact Web Portal;
- CreationOnline;
- Xact File Transfer;
- BO Upload a;
- SWIFT MT565, MT568, MT599 message by using the BIC address: CEDELULL.
a. Depending on market practice the BO list upload must be complemented by an instruction as indicated in the tax notification
Instruction format
To ensure straight-through processing and to benefit from the full life cycle of information, customers must send tax instructions using the correct format as follows:
Formatted instructions
- Formatted instructions (SWIFT MT565 and corresponding Xact Web Portal and CreationOnline instructions) must contain the following mandatory data: SWIFT MT565 – the standard rules for the completion of the SWIFT MT565, are described in the Xact via SWIFT User Guide.
- Any additional information required as described in the tax notification must be included.
Free-format instructions
Free-format instructions (SWIFT MT568 and MT599) must contain the following mandatory data to ensure validity:
- Exact event type;
- Clearstream Banking Corporate action reference ID (if any);
- Customer account number;
- Corporate action option number;
- Corporate action option code indicator;
- Quantity instructed (please refer to the eligible balance on the notification);
- The financial instrument identification number (ISIN or Common Code);
- Tax rate applied for;
- Any additional information required as described in the tax notification.
For instructions sent as free-format messages, automatic validation and processing is not applicable.
BO Upload
For BO lists uploaded via the BO Upload application customers should submit BO lists in the predefined format. The following data are mandatory to ensure validity of the BO lists:
- Customer account number;
- Security code (ISIN or Common Code);
- Security Name;
- Clearstream Banking Corporate Action Reference ID (if any);
- Record date;
- Payment date (if applicable);
- Holding;
- Any additional information required as specified in predefined format of a BO list.
Furthermore, customers must only include one instruction per message. One instruction consists of one:
- Event;
- customer account number;
- financial instrument identification number (ISIN or Common code);
- tax rate (multiple beneficial owners accepted per same tax rate applied).
If a customer includes more than one tax instruction per message, or if the additional text field on formatted messages includes an instruction or contradicts with the instruction given in the structured fields, Clearstream Banking cannot be held responsible for any loss or damage caused. Clearstream Banking reserves the right to reject instructions not formatted as described above.
Late instructions
Instructions received after the Clearstream Banking deadline are handled on a “best efforts” basis, however, execution cannot be guaranteed. If the instruction received after the Clearstream Banking deadline cannot be executed, Clearstream Banking will apply the standard tax rate as per market specifics (default action) and reject the customer’s late instruction accordingly.
When a correctly formatted MT565 instruction comes in after the Clearstream Banking deadline, customers receive an acknowledgement, advising the customer that the instruction is after the Clearstream Banking deadline and will be processed on a “best efforts” basis. After feedback from the depository or agent a revised processing advice is sent to customers.
Status and processing advice
Customers instructing via SWIFT MT565, Xact Web Portal or CreationOnline will receive a status and processing advice message for each tax instruction sent to Clearstream Banking.
Customers using Xact Web Portal or CreationOnline can check the status of their instructions directly in Xact Web Portal or CreationOnline and schedule the receipt of an MT567 via SWIFT.
In order to receive acknowledgements via SWIFT, a valid SWIFT address is required and the check boxes for “Acknowledgement of MT565 messages” and “Include all media channels” must be checked in the Scheduled Reports details.
If the tax instruction was sent using a free-format message, customers will not receive a status and processing advice and are responsible for monitoring the instruction execution.
Rejection of instructions
Clearstream Banking will inform the customer about rejection of instruction in following cases:
- Instruction is incomplete or invalid (as per instruction format definition);
- The corporate action reference ID is missing, ISIN (or common code) and/or corporate action reference ID provided in the related instruction do not match with an event;
- Any additional requirements (as per tax notification) are not satisfied.
Customers will be notified about a rejection via MT567 Status and Processing Advice or via MT568 SWIFT with a reason of rejection noted.
Fees
Customers are reminded that incorrectly formatted instructions will be subject to additional fees as shown in the Clearstream Banking Fee Schedule.
Impact on customers
Customers wishing to benefit from relief at source or quick refund through Clearstream Banking, must submit tax instructions, as per above guidelines, when applicable, together with any other additional mandatory documentation, as stated in our Market Taxation Guides, Tax announcements or Tax notifications.
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, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.