General information – types of securities, deadlines, other market specifics – Germany (CBF)
Types of securities
The eligible securities issued in Germany are as follows:
Debt securities not subject to withholding tax
- Government debt securities (including coupon strips and principal strips of strippable government bonds as detailed in the Creation Link Guide - Germany);
- Agency bonds;
- Foreign bonds;
- Communal bonds;
- Convertible bonds (Wandelschuldverschreibungen);
- Jouissance shares: profit participating rights that do not entitle the owner to liquidation proceeds (Genussscheine ohne Anteil an Liquidationserlös);
- Bonds conveying an interest in profits of the issuer (Gewinnobligationen).
Debt securities subject to an effective rate of withholding tax of 26.375%, depending on their character in each case
- Convertible bonds (Wandelschuldverschreibungen);
- Jouissance shares: profit participating rights that do not entitle the owner to liquidation proceeds (Genussscheine ohne Anteil an Liquidationserlös);
- Bonds conveying an interest in profits of the issuer (Gewinnobligationen).
Bearer equities and Registered Shares, subject to an effective rate of withholding tax of 26.375%
German funds certified according to InvStG
No withholding tax (Kapitalertragsteuer; KESt) and solidarity surcharge (Solidaritätszuschlag; SolZ) are deducted for fund distributions of German funds, if evidence is provided that the fund is an investment fund pursuant to § 1 of the German Investment Tax Act (Investmentsteuergesetz; InvStG) or a special investment fund pursuant to § 53 InvStG.
German funds not certified and subject to an effective rate of withholding tax of 26.375% on taxable elements
Note: If no tax base (Bemessungsgrundlagen) parts are delivered, the income amount is taken as the tax base.
The tax calculation on German growth (accumulation) funds is done on the following tax bases (Bemessungsgrundlagen), if the fund does not fulfill the above-mentioned requirements:
Cash distribution:
- Domestic Dividend Part (inländischer Dividendenanteil);
- REIT-Part (REIT-Anteil);
- Estate Part (Immobilienanteil).
Accumulation (Thesaurierung):
- Domestic Dividend Part (inländischer Dividendenanteil);
- Foreign Dividend Part (ausländischer Dividendenanteil);
- Interest Part (Zinsanteil);
- REIT-Part (REIT-Anteil);
- Estate Part (Immobilienanteil).
For German growth (accumulation) funds, distributions of tax liquidity are not processed by Clearstream Banking.
Beneficial owners recognised for tax purposes in Germany
The following types of beneficial owner of German securities are recognised for tax purposes in Germany:
- Residents of a Double Taxation Treaty (DTT) country.
- Residents of Germany.
Natural persons who have neither their residence nor their usual abode in Germany and legal entities, partnerships and assets that are neither managed nor domiciled in Germany have limited tax liability if they generate income in Germany within the meaning of §49 of the Income Tax Law (Einkommensteuergesetz; EStG).
Note: There are no domestic exemptions specifically available for foreign governments or supranational organizations. The conditions of the relevant DTT apply as appropriate.
Residents of a Double Taxation Treaty (DTT) country
A standard refund is available from the federal central tax office (“BZSt”) if the beneficial owner qualifies for the benefit of a reduced rate of withholding tax in accordance with a Double Taxation Treaty (DTT) between its country of residence and Germany.
Relief at source, quick refund and standard refund of withholding tax on income from German securities are currently not available through Clearstream Banking.
The service offered for certified investment funds is described in chapter “German Investment Tax Act (InvStG)”.
Residents of Germany
Clearstream clients that are residents of Germany cannot reclaim withholding tax through Clearstream Banking.
Beneficial owners who deposit their assets with Clearstream Banking, via Clearstream Banking S.A. or via a non-German depository bank can request German Tax Vouchers via their depository bank.
Statutory deadline for reclaiming withholding tax
Applications for refund of capital income tax in accordance with section 50c (3) / section 44a (9) of the Income Tax act must be submitted within a period of four years after the end of the calendar year in which the capital income or remuneration was accrued.
§11 (2) Investment Tax Act stipulates a differing deadline for certified investment funds. The application for a given fiscal year of the investment fund must be submitted to the BZSt within two years of the end of that fiscal year.
Notes on taxation
Clients warrant the completeness and accuracy of the information they supply to Clearstream Banking or to the tax authorities.
With respect to tax reclaims in general, clients are reminded that Clearstream Banking accepts no responsibility for their acceptance or non-acceptance by the tax authorities of the respective country.
Treatment of so-called "renounced holdings" (“abgesetzte Bestände”) in taxable income distributions
Positions that are held by the client in sub-account 650 on record date of a taxable income event are referred to as positions not entitled to the underlying taxable income event at the level of Clearstream Banking AG. In addition, the positions renounced may also include holdings that are deducted by Clearstream Banking AG on the client's instruction (without transfer to sub-account 650).
Holdings renounced are not considered when calculating entitlements and paying taxable income event distributions. This means that Clearstream Banking AG does not collect the income from the issuer's main paying agent for these holdings, nor does it distribute income proceeds on those renounced account holdings. The regulation of the income must be carried out by the customer. A deduction may be useful, for example, in the case of dividends within the meaning of Section 43b of the Income Tax Act (EStG) or in the case of owning one's own shares.
Since the income regulation for the renounced holding is not carried out by Clearstream Banking AG, no tax deduction is made by Clearstream Banking AG. In these cases, the tax deduction will generally have to be made by the issuer's main paying agent as part of the income regulation.
The client and the issuer of the underlying security will receive information on this deduction.