Quick refund - eligibility, documentation, deadlines - Czech debt securities
Who can apply for a quick refund?
Quick refund of withholding tax on interest from Czech debt securities is available through Clearstream Banking for the following eligible beneficial owners (who did not benefit from a relief at source):
| Eligible beneficial owners | Effective tax rate after refund | Tax refund available |
Residents of Double Taxation Treaty (DTT) countries | DTT rate or maximum 15% | 35% minus DTT rate or minimum 20% |
EU/EEA residents | 15% | 20% |
EU/EEA pension funds | 0% | 35% |
Central Banks | 0% (if granted by the DTT) | 35% (if granted by the DTT) |
International and Supranational Organisations | 0% | 35% |
Czech legal entities | 0% | 35% |
Czech individuals | 15% | 20% |
Documentation requirements
The documentation requirements are the same as for relief at source and are described below. The templates of the forms are available on our Tax forms to use section.
All beneficial owners regardless their residency and status and applying for quick refund on Czech debt securities
- One-Time Certification for Czech Republic withholding tax purposes regarding Debt securities and Equities held in Clearstream Banking
An original One-Time Certificate should be completed and signed by Clearstream’s customer. It specifies, among other things, whether the customer is the sole beneficial owner of all Czech securities held in the account.
The document must be provided once before the first applicable quick refund deadline and remains valid until revoked. However, any changes to any details must be communicated in a new One-Time Certificate.
- Per-payment instruction
The per-payment instruction should be completed by Clearstream’s customers holding Czech securities on behalf of third parties. It specifies among other things, complete data of each beneficial owner, the payment details and the withholding tax rate to be applied.
The document must be provided before each applicable quick refund deadline, either mail via Swift (formatted MT565 message), or via Xact Web Portal message (please refer to the CBL Customer Handbook for full formatting requirements).
In addition, and depending on the beneficial owners’ residency and status,
1. Czech residents (both individual and legal)
- Declaration of Beneficial Ownership
An original Declaration of Beneficial Ownership should be completed and signed by the final beneficial owner.
Should the beneficial owner be a Legal Entity, the certification must be either on the company letterhead paper or stamped.
Should the Declaration be completed by a third party, a clear statement also needs to be added to the Declaration, confirming that the third party was appointed as the beneficial owner’s attorney-in-law with authority to complete and sign the declaration on the beneficial owner’s behalf.
The document must be provided once before the first applicable quick refund deadline and remains valid for a period of three years.
Example: a DBO issued in 2019 remains valid until 31 December 2021.
- Power of Attorney
A Power of Attorney should be provided if a third party is completing the Declaration of Beneficial Ownership.
The document must be provided once before the first applicable quick refund deadline and remains valid until revoked.
- Copy of ID card
A copy of ID card should be provided by Czech beneficial owners in case:
- Clearstream’s customer is not a Czech resident, and
- The final beneficial owner is a Czech individual resident
The document should be provided before each applicable quick refund deadline.
2. Non-residents beneficial owners
- Declaration of Beneficial Ownership
An original Declaration of Beneficial Ownership should be completed and signed by the final beneficial owner.
Should the beneficial owner be a Legal Entity, the certification must be either on the company letterhead paper or stamped.
Should the Declaration be completed by a third party, a clear statement also needs to be added to the Declaration, confirming that the third party was appointed as the beneficial owner’s attorney-in-law with authority to complete and sign the declaration on the beneficial owner’s behalf.
The document must be provided once before the first applicable quick refund deadline and remains valid for a period of three years.
Example: a DBO issued in 2019 remains valid until 31 December 2021.
- Certificate of Residence
An original Certificate of Residence must be issued in Czech or English by the beneficial owner’s local tax authorities. The name mentioned on the Certificate of Residence should match the name specified in both the list of beneficial owners and the Declaration of Beneficial Ownership.
The document is valid one calendar year and should cover the record date of the income payment for which it is to be used.
- Power of Attorney
A Power of Attorney should be provided if a third party is completing the Declaration of Beneficial Ownership on behalf of the beneficial owner.
The document must be provided once before the first applicable quick refund deadline and remains valid until revoked.
3. EU/EEA Pension funds
- Declaration of an EEA Pension fund
An original Declaration of an EEA Pension fund should be completed and signed by the final beneficial owner’s authorised representative(s). It should be provided either on the company letterhead paper or stamped. It confirms that the final beneficial owner is a pension fund operation in the EU, Norway or Iceland and whose income is not attributable to a permanent establishment of the company in the Czech Republic.
Should the Declaration be completed by a third party, a clear statement also needs to be added to the Declaration, confirming that the third party was appointed as the beneficial owner’s attorney-in-law with authority to complete and sign the declaration on the beneficial owner’s behalf.
The document must be provided once before the first applicable quick refund deadline and remains valid for a period of three years.
Example: a DBO issued in 2019 remains valid until 31 December 2021.
- Certificate of Residence
An original Certificate of Residence must be issued in Czech or English by the beneficial owner’s local tax authorities. The name mentioned on the Certificate of Residence should match the name specified in both the list of beneficial owners and the Declaration of an EU/EEA pension fund.
The document is valid one calendar year and should cover the record date of the income payment for which it is to be used.
- Power of Attorney
A Power of Attorney should be provided if a third party is completing the Declaration of EU/EEA Pension fund on behalf of the beneficial owner.
The document must be provided once before the first applicable quick refund deadline and remains valid until revoked.
4. International and Supranational organisations
- Declaration of Beneficial Ownership for International and Supranational organisations
An original Declaration of Beneficial Ownership for International and Supranational organisations should be completed and signed by the final beneficial owner. It should be provided either on the company letterhead paper or stamped.
Should the Declaration be completed by a third party, a clear statement also needs to be added to the Declaration, confirming that the third party was appointed as the beneficial owner’s attorney-in-law with authority to complete and sign the declaration on the beneficial owner’s behalf.
The document must be provided once before the first applicable quick refund deadline and remains valid for a period of three years.
Example: a DBO issued in 2019 remains valid until 31 December 2021.
- Power of Attorney
A Power of Attorney should be provided if a third party is completing the Declaration of Beneficial Ownership for International and Supranational organisations on behalf of the beneficial owner.
The document must be provided once before the first applicable quick refund deadline and remains valid until revoked.
Important note:
Should the Czech Republic be a member of the International/Supranational Organisation and should this organisation be listed on the website of the Czech Ministry of Finance, no further documentation is required in order to benefit from the tax exemption. Should the Czech Republic not be a member of the International/Supranational Organisation and/or should this organisation not be listed on the website of the Czech Ministry of Finance, the following document is also requested:
- A proof of the International/Supranational organisation status
This proof of status should be provided along with the “Declaration of Beneficial Ownership for International and Supranational organisations” and can either be:
- A certification from the tax authorities confirming that the entity is an International/Supranational organisation eligible for tax exemption; or
- The international treaty, the foundation document or any other document proving that the entity is an International/Supranational organisation eligible for tax exemption.
The document must be provided once before the first applicable income payment and remains valid until revoked.
Deadlines for receipt of documents1
In order to benefit from a quick refund, eligible beneficial owners should provide the required documentation within the below prescribed deadlines. If any instruction, tax certification or amendment is received after these deadlines, the customer’s entire application for quick refund will be rejected.
Quick Refund | Deadline for receipt by |
Original certificates | At the latest, the 13th calendar day of the month following the payment date (if the 13th is not a business day, the deadline is the last business day before the 13th). |
Receipt of refunded amounts
The estimated time for receiving a quick refund is two weeks from the date the quick refund was filed.
Notes on quick refunds
CBL can give no guarantee with regard to the quick refund procedure in general as it is based on market practice and all applications depend on the good will of the paying agent. Although CBL will assist customers with quick refund applications, it can only remit to customer’s accounts the amounts that it receives.
--------------------
1. Customers are strongly recommended to verify the deadlines of each event in our tax notifications, as those may be subject to changes upon the request of the issuer.