Standard refund - Eligibility, documentation, deadlines - Portuguese equities - CBF
Who can apply for a standard refund?
A partial standard refund of withholding tax on dividends from Portuguese equities is available through Clearstream Banking for beneficial owners who are residents of a DTT country and did not obtain the treaty rate at source or via the quick refund (the “treaty standard refund”), or for those eligible to the standard rates (28% or 25%), as follows:
Eligible beneficial owners | Effective rate of tax after refund | Tax refund |
Residents of a Double Taxation Treaty (DTT) country | Tax treaty rate | 35% minus |
Portuguese non-residents not eligible for tax exemption but applying for 28% or 25% standard tax rate | 28% or 25% | 35% minus 28% or 25%b |
a. Expressed as a percentage of the gross dividend amount.
b. Residents of tax havens having a DTT in place with Portugal cannot benefit from the standard 25% or 28%, respectively, but can benefit from DTT rates.
Important note: Clients are reminded that full standard refund is not available through Clearstream Banking.
Clients are strongly encouraged to use the relief at source or quick refund procedures. Furthermore, we remind clients that standard refund applications depend on the final approval of the Portuguese Tax Authorities (PTA) and that Clearstream Banking accepts no responsibility for their acceptance or non-acceptance by the respective authorities.
To apply for the treaty standard refund from withholding tax on dividend payments for equities, the beneficial owners have to fulfil the following reporting and documentation requirements:
Pre-requisite for each treaty standard refund application
All clients applying for treaty standard refund must submit:
- Before the first standard refund application, a Portuguese Tax Identification Number (TIN) Request for each beneficial owner applying for treaty standard refund and not yet having a Portuguese TIN. If a Portuguese TIN already exists, it has to be provided to Clearstream Banking to obtain confirmation of its validity. Clients should always wait for the confirmation from Clearstream Banking that the TIN is valid before initiating their standard refund application;
- Annually, the Individualised Securities Registration Report (ISRR) completed by the client once a year and including all transactions (that are domestic, internal Clearstream Banking or Bridge transactions) that took place during the year of the dividend payment.
Deadlines for receipt of documents for reporting purposes
Documentation requested for reporting purposes must be received by Clearstream Banking by the following deadlines:
Type of document | Deadline for receipt by |
Portuguese Tax Identification Number (TIN) Request | At least one month before the first standard refund application (if not already provided). |
Individualised Securities Registration Report (ISRR) | At the latest 10 business days before the end of the third month following the year in which the Portuguese securities were purchased and / or in which the dividend payment took place, by 10:00 CET. |
Documentation requirements for treaty standard refund application
To apply for a treaty standard refund of withholding tax on dividends from Portuguese equities, the following documentation must be submitted to Clearstream Banking
For beneficial owners that are residents of Double Taxation Treaty (DTT) countries (including Luxembourg SICAVs):
- Form Mod. 22-RFI must be provided per refund application; and
- Certificate of Residence (COR); and
- Power of Attorney if Mod-22 RFI is not signed by the final beneficial owner; and
- Power of Attorney for Tax Reclaim Processes Follow Up; and
- Letter of Request to Clearstream Banking for Reclaim of Portuguese Withholding Tax.
In addition to the above, the following documentation is requested for DTT residents according to their status:
Funds:
- Statement for Funds: Declaration issued by the fund’s local authorities certifying that the respective trust or fund is liable to tax in its country of residence and is not transparent for tax purposes. The Declaration must be provided annually in addition to the documentation requested for DTT residents (that is, Mod 22-RFI, Power of Attorney, etc.). The beneficiary undertakes full responsibility to update information and amend the declaration if need be should there be any relevant fact changes
U.S. pension funds and Regulated Investment Companies (RIC):
- A form 6166 confirming that the pension fund or the RIC is liable to tax in U.S.A., and
- A Statement for U.S. pension funds and RIC issued by the IRS or self-declaration confirming that the beneficial owner complies with conditions foreseen in Article 17, number 1 c) and e) of the DTT between Portugal and the U.S.A.
Certification requirements are to be fulfilled annually and the beneficiary undertakes full responsibility to update the information and amend the declaration, if need be, should there be any relevant fact changes.
For Luxembourg SICAV
- A COR stating that the entity is considered as a SICAV for the year of the income. The COR is valid for one (1) year date-to-date, unless otherwise specified on the document.
Swiss pension funds
- Statement for Swiss pension funds: Declaration issued by the pension fund’s local authorities certifying that the respective entity is
- 1) a pension fund in which individuals participate to secure old-age, disability and survivors' insurance and
- 2) the pension fund is established, recognised for tax purposes and controlled under the laws of Switzerland, is liable to tax in its country of residence and is not transparent for tax purposes.
Deadline for receipt of treaty standard refund documents
The statutory deadline for reclaiming withholding tax using the treaty standard refund procedure is two years following the end of the year in which the dividend payment took place.
The deadline by which Clearstream Banking must receive the documentation for an application is at the latest two (2) months before the statutory deadline. All standard refund applications received after this deadline will be processed by Clearstream Banking on a best-effort basis. However, in such cases, Clearstream Banking will apply an extra charge and accepts no responsibility for forms that have not reached the Portuguese Authorities by the date considered as being the statute of limitations deadline.
When are refunds received?
There is no estimated time for receiving a refund via the treaty standard refund application and clients are strongly encouraged to use the relief at source or quick refund procedures.