Form descriptions – KGBs and MSBs (Securities deposited with KSD)
Information is provided here about the forms and their use in relation to the procedure for relief at source of withholding tax on income from South Korea securities, as follows:
- Confirmation Letter of Private OIV’s Failure of Investor Verification
- Form 19-12: Application Form for Approval as ‘Qualified Foreign Intermediary, etc. (QFI)’ and Statement of Approval
- Form 19-13(3): Application for tax exemption on interest income and capital gains from investment in Government Bonds and Monetary Stabilisation Bonds
- Form 72-7: Application for tax exemption on interest income and capital gains from investment in Government Bonds and Monetary Stabilisation Bonds (for foreign corporations)
- One-Time Certificate for KGBs and MSBs
- Power of Attorney (POA) to Clearstream Banking1
- Statement of Requirements for Approval as a Qualified Foreign Intermediary etc. (QFI) and its attachments
- Certificate of Residence (CoR).
- Swift MT599 or Xact message.
- Power of Attorney (POA) to KSD
Certificate of Residence (COR)
A certificate proving the residency of the beneficial owner, issued by the beneficial owner’s local tax authorities.
How many are provided? | One per beneficial owner. One per Clearstream Banking client. |
Who completes it? | Beneficial owner’s local tax authorities. Clearstream Banking client’s local tax authorities. |
How often is it provided? | Valid until revoked. Unless there is a change in the details. |
When is it provided? | Before the first investment. |
Copy or original? | Original required when the final beneficial owner is Clearstream Banking direct client. Copy if the final beneficial owner is not Clearstream Banking direct client (electronic copy should be submitted by the QFI to Clearstream Banking) and for QFI status application. |
Confirmation Letter of Private OIV’s Failure of Investor Verification
The Confirmation Letter of Private OIV’s Failure of Investor Verification is a document stating that the investment vehicle is unable to verify the investors investing in the overseas investment vehicle. It confirms that the investment vehicle is an overseas investment vehicle treated as the beneficial owner pursuant to Article 93-2 (1) 3 of the Corporate Tax Act of the Republic of Korea.
How many are provided? | One per beneficial owner. |
Who completes it? | The beneficial owner. |
How often is it provided? | Valid until revoked. Unless there is a change in the beneficial owner’s details. |
When is it provided? | Before the first investment. |
Copy or original? | Original required. |
Form 19-12: Application Form for Approval as ‘Qualified Foreign Intermediary, etc. (QFI)’ and Statement of Approval
The Application Form for Approval as ‘Qualified Foreign Intermediary, etc. (QFI)’ and Statement of Approval contain the Qualified Foreign Intermediary’ s (QFI) information. The Application and Statement should be submitted by the client to apply for the QFI status.
How many are provided? | One per Clearstream Banking client. |
Who completes it? | Clearstream Banking client. |
How often is it provided? | Valid until revoked. Unless there is a change in the client’s details. |
When is it provided? | Before the first investment. |
Copy or original? | Original required. |
Form 19-13(3): Application for tax exemption on interest income and capital gains from investment in Government Bonds and Monetary Stabilisation Bonds
The Application for tax exemption on interest income and capital gains from investment in Government Bonds and Monetary Stabilisation Bonds contains the QFI’s information. The Application should be submitted by the client to apply for the QFI exemption.
How many are provided? | One per Clearstream Banking client. |
Who completes it? | Clearstream Banking client. |
How often is it provided? | Valid until revoked. Unless there is a change in the client’s details. |
When is it provided? | Before the first investment. |
Copy or original? | Original required. |
Form 72-7: Application for tax exemption on interest income and capital gains from investment in Government Bonds and Monetary Stabilisation Bonds (for foreign corporations)
The Application for tax exemption on interest income and capital gains from investment in Government Bonds and Monetary Stabilisation Bonds (for foreign corporations) contains the final beneficial owner’s information. The Application should be submitted by the final beneficial owner to apply for exemption.
How many are provided? | One per beneficial owner. |
Who completes it? | The beneficial owner. |
How often is it provided? | Valid until revoked. Unless there is a change in the beneficial owner’s details. |
When is it provided? | Before the first investment. |
Copy or original? | Original required when the final beneficial owner is Clearstream Banking direct client. Copy if the final beneficial owner is not Clearstream Banking direct client (electronic copy should be submitted by the QFI to Clearstream Banking). |
One-Time Certificate for KGBs and MSBs
The one-time certificate for KGBs and MSBs must be completed and signed by the Clearstream Banking client.
How many are provided? | One per Clearstream Banking client. |
Who completes it? | Clearstream Banking's client. |
How often is it provided? | Valid until revoked (unless there is a change in the client’s details). |
When is it provided? | Before the first investment. |
Copy or original? | Original/Qualified E-Signature (if applicable) required. |
Power of Attorney (POA) to Clearstream Banking
The Power of Attorney is executed by the Clearstream Banking client granting Clearstream Banking and the agent KSD the right to act on their behalf.
How many are provided? | One per Clearstream Banking client. |
Who completes it? | Clearstream Banking client. |
How often is it provided? | Valid until revoked. Unless there is a change in the client’s details. |
When is it provided? | Before the first investment. |
Copy or original? | Original required. |
Statement of Requirements for Approval as a Qualified Foreign Intermediary etc. (QFI) and its attachments
The Statement of Requirements for Approval as a QFI and its attachments (when applicable; Proof of statistics related to custody volumes, Proof of financial soundness and credit ratings, Certificate of acquisition of status similar to QFI overseas) must be submitted by the QFI in order to apply for the QFI status.
How many are provided? | One per Clearstream Banking client. |
Who completes it? | Clearstream Banking client. |
How often is it provided? | Valid until revoked. Unless there is a change in the client’s details. |
When is it provided? | Before the first investment. |
Copy or original? | Original required. |
Swift MT599 or Xact message
Clients must provide, where appropriate, a Swift MT599 or Xact message that includes the following QFI(s) and final beneficial owner details:
Attention: SIT – Tax team
Market:______________
Account number(s): ______________
We, ______________(insert client’s name), as a Qualified Foreign Intermediary (QFI), are not the final beneficial owner of Korean Government Bonds and Monetary Stabilisation Bonds that we may hold from time to time in our account(s).
We are acting as QFI through ______________(please insert either “another QFI” or “multiple QFIs”).
We confirm having submitted to Clearstream Banking1 the necessary documents to proof the QFI(s) status approval and tax exemption approval of all intermediary(ies) QFI(s) in the custody chain and the necessary documents to apply for the final beneficial owner’s tax exemption.
We hereby certify that the information contained in such tax certificate(s) is true, correct and complete.
Please note that the investment chain is as per below:
QFI (1)
Name:
Taxpayer ID:
Address:
QFI (2)
Name:
Taxpayer ID:
Address
…
QFI (X) – facing the final Beneficial owner
Name:
Taxpayer ID:
Address:
Final beneficial owner
Name:
Taxpayer ID:
Address:
We further agree that we shall immediately (without any delays) advise Clearstream Banking via SWIFT in case of:
- change of circumstances impacting any intermediary in the custody chain and/or the beneficial owner,
- any change in the QFIs sequence in the custody chain,
and submit the necessary amended tax forms.
Kind regards,
__________ (insert contact details)
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.
How many are provided? | One per Clearstream Banking account. |
Who completes it? | Client. |
How often is it provided? | Once (unless there is a change in the intermediary(ies)/final beneficial owner details, custody chain). |
When is it provided? | Before the first investment. |
Copy or original? | Swift message MT599 (“Attention to SIT - Tax team”) or via Xact message. |
Power of Attorney (POA) to KSD
The Power of Attorney is executed by the last QFI facing the final beneficial owner granting the agent KSD the right to act on their behalf.
How many are provided? | One per QFI. |
Who completes it? | The last QFI facing the final beneficial owner |
How often is it provided? | Valid until revoked. Unless there is a change in the QFI’s details. |
When is it provided? | Before the first investment. |
Copy or original? | Original required. |
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1. Clearstream Banking refers collectively to Clearstream Banking S.A. and Clearstream Banking AG (for Clearstream Banking AG clients using Creation accounts).