Standard refund - eligibility, documentation, deadlines - Lithuanian debt securities
Who can apply for a standard refund?
A standard refund of withholding tax on income from Lithuanian corporate bonds is available if the non-resident beneficial owner qualifies for a reduced rate in accordance with:
- the Double Taxation Treaty (DTT) between their country of residence and Lithuania, or
- Lithuanian domestic legislation, as described below.
Corporate bonds | ||
Eligible beneficial owners | Effective rate of tax after refund | Tax refund |
Non-Lithuanian legal entities registered or otherwise established in any state of the European Economic Area (EEA) or in any country with which Lithuania has an effective Double Taxation Treaty (DTT); | 0% | 15% |
EU pension fundsb | 0% | 15% |
Non-Lithuanian legal entities registered or otherwise established in a non-EEA/DTT country | 10% | 5% |
Non-Lithuanian individuals registered or otherwise established in any country with which Lithuania has an effective DTT in place | Tax treaty rate or 15%, whichever is lower | 15% minus |
Non-Lithuanian individuals on the amount of interest (including all interest from other securities acquired after 1 January 2014 and deposits where agreement was concluded after 1 January 2014) that does not exceed 500 EUR per tax year | 0% | 15% |
Non-Lithuanian individuals if bonds are acquired before 1 January 2014 where corporate bonds were repurchased not earlier than 366 days from their emission, except in cases where interest is received from a tax haven | 0% | 15% |
a. Expressed as a percentage of the gross dividend amount.
b. An EU pension fund is considered a fund that is not recognised as a legal entity and established to facilitate and organise the investment of natural persons' retirement funds. The pension fund is a common asset pool meant to generate stable growth over the long term and provide pensions for natural persons when they reach the end of their working years and commence retirement. The assets of the fund are managed by a pension fund management company according to the fund's rules.
c. Amount of relief will be 0% if the DTT rate exceeds 27%.
Documentation requirements
To apply for a standard refund of withholding tax on income from Lithuanian securities, the following documents must be submitted to Clearstream Banking:
- Letter of Request to Clearstream Banking for Reclaim of Lithuanian Withholding Tax
- DAS-2 Official Claim Form
- Certificate of residence (if applicable)
- Power of Attorney in favour of Nasdaq CSD SE Lithuanian Branch
- Power of Attorney
- Credit advice
Statutory deadline for reclaiming withholding tax
The statutory deadline for reclaiming withholding tax using the standard procedure is five years after the relevant income payment for which tax reclaim is to be made, unless the DTT in place specifies a different deadline; for example, the DTT between Luxembourg and Lithuania defines a deadline of three years.
Clearstream deadline for standard refund applications
The deadline by which Clearstream Banking must receive the documentation for a standard refund application is, at the latest, two months before the statutory deadline. All standard refund applications received after this deadline will be processed by Clearstream Banking on a “best-efforts” basis. However, in such cases, Clearstream Banking will apply an extra charge and accepts no responsibility for forms that have not reached the Lithuanian Tax Authorities by the date considered being the statute of limitations deadline.
For tax reclaims, you are reminded that Clearstream Banking accepts no responsibility for their acceptance or rejection by the tax authorities of the respective country. It is the customer’s responsibility to determine any entitlement to a refund, to complete the forms required correctly and to calculate the amount due.
When are refunds received
The estimated time for receiving a refund is four months from the date on which Clearstream Banking receives the certified documents, although this can vary depending on when the application is filed, and the complexity of the information supplied in the reclaim form.