2015 Operational Updates
Acupay 6166 Wizard
October 2015: Application for a U.S. Certificate of Tax Residence - IRS Form 6166
To apply for tax relief, the majority of jurisdictions require that investors provide a certificate of residence as proof of their tax residency status. In the U.S., residency is certified by the U.S. Tax Authorities (IRS) on an IRS Form 6166 (U.S. Certificate of Tax Residence), which is obtained by completing a Form 8802 (Application for U.S. Residency Certification).
The process for submitting Form 8802 is notoriously complex. To assist investors and their custodians in this process, Acupay has developed an innovative online solution called the Acupay 6166 Wizard. The Wizard guides investors (or their custodians) to input only the information required for the entity type in question. This means that the submission process should take no longer than 5 minutes per application. Another notable benefit is that once the form has been submitted, Acupay will handle all interaction with the IRS, guaranteeing that each 6166 request is processed in a timely manner by the IRS (historically 4-6 weeks). Acupay is proud of its 99% rate of successfully processed 6166 applications using the 6166 Wizard.
Currently the 6166 Wizard only offers a One-by-One Submission method. However, Acupay also plans to offer a Bulk Upload method by late 2015 which will allow custodians to submit all of their applications for Forms 6166 in one single submission for multiple beneficial investors. Please take note that the IRS will only start to process Forms 6166 for tax year 2016 from 1 December 2015.
For further assistance with the 6166 Wizard, please contact Acupay’s A-Team.
March 2015: Obtaining an IRS Form 6166 - Streamlined Application for U.S. Certificates of Residence
A great deal of jurisdictions require a certificate of residence (COR) to process a tax relief request, especially in the world of equities and long form reclaims. The process of obtaining a COR directly from the U.S. tax authority is especially cumbersome and takes at least 8 weeks to receive.
Acupay has developed an easy-to-use online application tool called the 6166 Wizard to help investors and their representatives, including custodians, apply for an IRS Form 6166. The Wizard guides applicants through the steps necessary to request the IRS Form 6166, asking only the minimum amount of information required for each individual situation. For example, an individual will not be asked questions related to complicated fund structures. Once completed, investors will simply need to print out the form, sign, and either fax or email a scanned copy to Acupay. We will then handle all interaction with the IRS on the investor’s behalf, ensuring that each request is processed in a timely manner for the quickest possible turnaround. There will be no need for any intervention by the custodian.
The IRS charges an $85 processing fee to produce an IRS Form 6166, and there is a small Acupay processing / shipping and handling fee of $15 for each application. Please note that one request can also cover certificates for multiple past years, enabling investors to recover excess tax withheld on past payments with one wizard application.
For any questions, please contact Acupay’s A-Team.
Acupay System Improvements
September 2015: New Search Tools
As communicated in our July newsletter our web development team has recently developed a highly sophisticated reporting tool – Submission Search – which allows participants to efficiently view their past and currently outstanding tax relief submissions, with the option of filtering and downloading the submission details in a CSV format.
Following the successful launch of the Submission Search, we have also introduced an improved Investor Documentation Search. This new tool allows you to quickly and effectively search and view investor documents that are on file with Acupay.
You will have the option to sort and filter documents by typing the investor/document details into the filter boxes.
You can also filter by document validity using the new Search By Payment Period. For example, you would be able to see if you have any Spain-specific Certificates of Residence that are valid for the Telefonica ADR payments for tax year 2014. You can even add/remove columns based on the criteria you wish to search for.
Another new feature is our Bulk Search Option, which allows you to search for multiple Tax ID’s simultaneously. Simply click the ‘BULK’ button, paste all the Tax IDs you’re searching for into the text window and click Submit. All documents on file for the list of Tax IDs entered will be displayed.
If you have any questions or require any guidance on how to use our new tools, please don’t hesitate to contact Acupay’s A-Team.
July 2015: New Reporting Facilities
Our latest improvement to the Acupay System is the introduction of a highly sophisticated reporting tool for a participant’s past and currently outstanding tax relief submissions.
The new reporting tool – Submission Search – can be located by selecting its tab in the Acupay System:
This new tool will allow you to quickly view, search, and filter all submissions that have been made by an Authorized Representative or the entire firm. Simply type the information you’re searching for, such as the issuer name, payment date, or tax ID into the filter boxes to narrow down the data to your needs. In addition, you may view all tax documentation and forms on file in the CORE Library for each of your beneficial owners. You can even add/remove columns on the table using the Options button in the upper-right corner
. Another new feature is that you will now be able to download your submission details as a CSV file. This will allow you to choose to download (i) all or specifically filtered data and (ii) all columns or only a certain subset. Therefore, the new function allows you to custom-build reports of your Acupay tax relief activity for your own purposes.
If you have any questions or would like to set up a tutorial on how to use our new Submission Search, please don’t hesitate to contact us.
Do you have any comments or suggestions regarding the Submission Search function? If so, the Product Management and Client Engagement team would like to hear from you.
April 2015: Italian Yankee Bond Transfer Requests
Over the past months our system development team has been working hard to improve and add functionality to the Acupay System. These updates aim to ensure that your day-to-day tax relief operations are more efficient and user-friendly. Our latest improvement lets you prepare and submit the relevant documentation for Transfer Requests, in relation to Italian Yankee bonds, directly on the Acupay System via your Acupay registration.
Once logged into the Acupay System, you can easily locate and complete any Italian Transfer Request Forms under “Tax Documentation and Forms Library”.
Therefore, participants who have been exchanged into one of the alternate net-paying CUSIPs (N Receipts), as a result of non-eligibility or non-compliance with the tax reporting procedures, and wish to transfer their position (to an X Receipt for example), can now log into the Acupay System and request a Transfer instantly.
If you require assistance with the completion of these forms, or have any questions, please contact Acupay’s A-Team.
Austria
September 2015: Amendment to Statutory Withholding Tax Rate (Effective 1 January 2016)
On 7 July 2015, tax legislative changes in Austria were passed by the parliament, which were approved by the Federal Council on 23 July 2015.
Under the decree, effective from 1 January 2016, the withholding tax rate for dividends will be increased to 27.5% (from the current rate of 25%). It is expected that the 25% rate would continue to apply for dividends paid to foreign corporations, but this is subject to confirmation by the Austrian tax authorities. A change to the interest payment regime has also been announced for which we will communicate further updates via our monthly newsletter.
If you have any questions, please don’t hesitate to contact Acupay’s A-Team.
Belgium
August 2015: Guidelines with regards to Statutory Deadlines for Standard Refund Applications
It appears that the Belgian Tax Authority has changed their practice towards the application of statutory deadlines for standard refund applications.
According to law provisions, the statutory deadline for reclaiming tax withheld on payments made after 1 January 2011 is:
1 January of the payment year + 5 years.
Whereas the statutory deadline for reclaiming tax withheld on payments made before 1 January 2011 is:
1 January of the year following the payment year + 5 years.
However, the Belgian Tax Authority has indicated that they will be adopting a similar approach for pre-2011 payments to the one applied to payments as from 1 January 2011.
Impact on Participants:
We strongly recommend clients to consider this change of practice by the Belgian Tax Authority and apply the following deadline for ALL tax refund applications, irrespective of the payment date:
1 January of the payment year + 5 years.
This will help avoid the risk of having tax reclaims rejected by the Belgian Tax Authority.
To illustrate this change of practice, for the 8 June 2010 Delhaize ADR dividend payment the statutory deadline would have been on 1 January 2016 under the old rule. However as per the new ruling, the statutory deadline may have expired on 1 January 2015. As there is still some ambiguity with regards to the revised statute period, Acupay will continue to accept standard refund submissions for this ADR dividend payment and will process these reclaims on a best efforts basis.
Acupay is seeking clarification from the Belgian Tax Authorities with respect to the revised statute period, as well as the date from which the new statute came into effect. Any further updates will be communicated via our newsletter.
If you have any questions, please don’t hesitate to contact Acupay’s A-Team.
June 2015: Delhaize Group ADR (ISIN: US29759W1018) - Standard Refund: 9 June 2015 Dividend Payment
Beginning on June 24, 2015 up until November 18, 2019, Acupay will be accepting Standard Refund submissions for all holders who did not submit their tax relief request during the Quick Refund phase for the June 2015 dividend payment.
Once a claim has been filed with the Belgian Tax Authorities, it may take between 6 to 18 months for the funds to be received.
We kindly remind you that Acupay can also assist you with recovering excess withholding tax on any Belgian ordinary shares and ADR dividend payments. For more information, please contact our Reclaims team.
February 2015: Supporting Documents for Refunds Exceeding EUR 200,000
The Belgian tax authorities (BTA) are now requesting additional information and supporting documentation for refunds exceeding EUR 200,000. Claimants must substantiate their refund request by providing:
A copy of the credit advice from the previous dividend payment, if received by the same investor.
A statement containing the details of all the transactions between the previous dividend payment and the dividend payment stated on the reclaim form. (see NOTE below)
Please note that both documents must be certified by two authorised signatories of the entity that issues the credit advice.
For reclaims currently pending with the BTA which exceed EUR 200,000, be aware that the tax authorities may still request these additional documents.
This requirement is in addition to a requirement that was previously communicated by the BTA whereby refunds exceeding EUR 150,000 must be accompanied by a purchase confirmation for the shares, which must also be signed by 2 authorised signatories of the relevant broker(s).
If you have any questions, please contact our Reclaims team.
NOTE: This is only required if there were transactions between the previous dividend payment and the dividend payment for which the reclaim is submitted.
Germany
November 2015: 2015 German Dividend Season – DTV Submission Deadlines
Acupay supports the German Tax Agency’s (the “BZSt”) electronic tax relief program, known as the DTV, by providing custodians with an electronic link to the BZSt via an automated tax processing platform.
The market deadline to submit tax relief requests via DTV is 6 months after the ordinary share payment date. To ensure timely filing with the BZSt the deadline to submit on the Acupay System will be 5 months and 1 week after the ordinary share payment date.
For more information regarding German tax relief requests, please contact the Acupay D-Team.
Israel
December 2015: The Israel Electric Corporation Limited - Upcoming Payment Date
46507MAD4 / US46507MAD48
46507MAE2 / US46507MAE21
46507NAD2 / US46507NAD21
46507NAE0 / US46507NAE04
The Israel Electric Corporation became the first Israeli company to issue debt using the Acupay System for cross-border tax relief. The system evaluates foreign investors’ holdings so that they can be paid interest exempt from Israeli withholding tax, in accordance with the requirements of the Israeli Tax Authorities.
The next interest payment date will take place on 21 December 2015. To receive the favourable tax treatment, DTC participants must certify the tax residence information of exempt entities on the Acupay System and make a matching instruction via DTC’s CA Web service.
Acupay System opened for certification: 07 December 2015 (9am EST)
Acupay System closes for certification: 18 December 2015 (8pm EST)
Indirect DTC Participants (including Euroclear and Clearstream) will need to follow the tax relief procedures set out by their custodian. Please be aware that your custodians will more than likely set deadlines well before Acupay’s deadline. For this reason, we would like to encourage you to strictly adhere to your custodian’s deadline to guarantee timely submission of your instruction to upstream financial intermediaries.
A copy of the DTC Important Notice and Tax Compliance Procedures can be found on the Acupay website.
June 2015: The Israel Electric Corporation Limited - Upcoming Payment Date
46507MAD4 / US46507MAD48
46507NAD2 / US46507NAD21
46507MAE2 / US46507MAE21
46507NAE0 / US46507NAE04
The next interest payment for the above-listed Israel Electric Notes will take place on June 21, 2015 (with funds disbursed on June 22, 2015). Interest on these notes is generally subject to Israeli withholding tax, except for:
Non-Israeli beneficial owners
Regulated Israeli financial institutions
Israeli tax residents with an Israeli Certificate of 0% Withholding
DTC participants may obtain exemption from 26.5% withholding tax, so long as they certify exempt persons and entities through the Acupay System and submit a matching CA Web Instruction via DTC.
Acupay opened for certification: June 8, 2015
Acupay closes for certification: June 19, 2015
(Be aware that if you hold your Notes outside of DTC, your custodian will likely set deadlines well before the Acupay deadline.)
Indirect participants in DTC, including participants in Euroclear and Clearstream will need to follow the tax relief procedures and deadlines as set out by their custodian. To ensure timely submission of your instruction to upstream financial intermediaries, please be sure follow the deadline as set out by your custodian.
Tax rates and instructions on how to submit for tax relief can be found on the Acupay website.
Italy
October 2015: Italy – Tax Treaty with Hong Kong Enters Into Force
We would like to make you aware that the tax treaty between Italy and Hong Kong, which was signed in January 2013, entered into force on 10 August 2015. As such, for Hong Kong investors investing in Italian securities, the provisions in the treaty will apply from 1 January 2016, whilst for Italian investors investing in Hong Kong securities, the treaty will apply from 1 April 2016. Please note that, until such time as Hong Kong appears on the Italian White List, Hong Kong residents are not entitled to exemption at source or via standard refund under Law Decree 239/1996. The inclusion of Hong Kong on the Italian White List requires further legislation in Italy.
We will keep you updated on any developments on the provisions of this tax treaty. The latest version of the Italian White List can be found here.
February 2015: Republic of San Marino Added to the Italian White List
On 29 December 2014, the Italian Ministry of Finance issued a decree adding San Marino to the Italian White List. This change is effective as of 9 January 2015.
From this date, most beneficial owners that are residents of San Marino are eligible for an exemption of 26% Italian substitute tax on bonds subject to Law Decree 239/1996, including all the Italian Yankee Bonds for which Acupay acts as the Tax Certification Agent.
If your books and records show that you hold Italian debt securities on behalf of tax residents of San Marino, please make sure you follow the relevant procedures to obtain tax relief or forward this message to your omnibus accounts.
For more information regarding Acupay’s Italian tax compliance and relief procedures, as well as an updated version of the Italian White List you may visit our website.
Norway
January 2015: Norwegian Withholding Tax Reclaim Support Available
Acupay also offers support in recovering excess withholding tax on Norwegian ordinary shares. To obtain a refund, proof demonstrating the chain of custody through which the shares were held and the dividends were paid, must be provided.
Requests for tax relief via long form reclaim can be submitted to the Norwegian tax authorities until the statute of limitation expires. In general, a claim must be filed by December 31 in the year after the dividend distribution was decided unless an applicable tax treaty directs otherwise. However, the tax authority has the discretionary power to take claims into consideration for up to three years.
It is estimated that the time for processing a successful refund is approximately 12 months.
If you wish to reclaim Norwegian withholding taxes for any of your clients, please contact our Reclaim team for further information.
Spain
November 2015: Telefonica S.A. ADR (ISIN: US8793822086) – Q4 Scrip Dividend Payment
On 30 September 2015, the Executive Commission of Telefonica S.A. adopted appropriate corporate resolutions related to a scrip dividend which will be available to holders of Telefonica American Depositary Shares (ADSs). This was approved by the shareholders at the Annual General Shareholder’s Meeting on 12 June 2015. It is expected that the record date will be 17 November 2015, however this and the definitive fixed price and conversion ratio are subject to confirmation.
At the request of Telefonica S.A., Citibank (the ADS Depositary) has arranged with Acupay to provide a tax relief service to assist holders of Telefonica ADSs in obtaining a reduction in Spanish withholding tax (currently 19.5%). A DTC Important Notice providing full details of the tax relief filing procedures and documentation requirements will be distributed once all details applicable to the scrip dividend payment have been confirmed.
If you wish to receive a copy of this notice as soon as it is available, please contact the A-Team.
August 2015: Amendment to Statutory Withholding Tax Rate
The Legislative Royal Decree 9/2015 (RDL 9/2015), approved by the Spanish Government on 10 July 2015, introduced a reduction in the Spanish withholding tax rate from 20% to 19.5% on all Spanish securities. The change became effective on 12 July 2015, and will reduce the withholding tax rate for all payments as of value date 13 July 2015.
Please be advised that the withholding tax rate to be applied to interest or dividends distributed by companies set up in the Navarra region remains at 20% until further notice.
The Spanish Government has also conveyed its intention to further reduce the withholding tax rate to 19% in 2016. Acupay will continue to monitor the status of this amendment and will keep you updated.
May 2015: Telefonica S.A. ADR (ISIN: US8793822086) – Upcoming Dividend Payment
Please note that Acupay is accepting Relief at Source submissions for the current Telefonica ADR dividend payment.
Acupay opens for Relief at Source certification: 12 May 2015
Acupay closes for Relief at Source certification: 15 May 2015
For those holders who have not had a chance to submit their tax relief requests during the relief at source window, a Quick Refund service will be available from 26 May 2015 until 3 June 2015. Hereafter, participants may request a tax refund directly from the Spanish tax authorities by filing a Standard Refund with Acupay.
Holders who are seeking a favourable tax rate under double taxation treaties will need to either provide a valid Spain-specific certificate of residence (see NOTE below) or already have one on file with Acupay. A matching CA Web Instruction will also need to be entered by participants at DTC to support tax relief requests submitted during both the relief at source and quick refund phases.
If you have any questions, or require any assistance with the tax relief procedures, you may consult the DTC Important Notice, or contact Acupay’s A-Team.
NOTE: A Petición de Reducción/ Devolución is required for certain countries of tax residences.
April 2015: Abengoa S.A. ADR (ISIN: US00289R2013) – Upcoming Dividend Payment
Abengoa has announced a dividend payment of EUR 0.113 per ordinary share (ORD), or approximately USD 0.614 per ADR (1 ADR : 5 ORD), to be paid to shareholders holding a position as of the record date (Thursday, 16 April 2015).
The dividend will be subject to 20% Spanish withholding tax. A reduced Spanish tax withholding rate will be available by submitting a valid tax relief request via the Acupay System. Acupay will offer a quick refund and a standard refund service.
Be aware that for each beneficial owner, you will need to provide a Spain-specific certificate of tax residence (see NOTE below) which covers the ordinary share payment date.
To receive a copy of the DTC Important Notice as soon as it is available, please register your interest with the A-Team.
NOTE: A Petición de Reducción/ Devolución is required for certain countries of tax residences.
February 2015: Amendment to Statutory Withholding Tax Rate
As a result of the publication of Spanish Law 26/2014 in the official Gazette, the non-resident withholding tax rate applicable to dividends and interest has been reduced from 21% to 20%. Please note this change is effective as of 1 January 2015.
Switzerland
June 2015: Tax Reclaims on Swiss Securities
In Switzerland, interest, dividends, and other distributions of profits made by Swiss companies are subject to 35% withholding tax at source.
Relief at Source and Quick Refund services are generally not available on Swiss ordinary shares and debt securities, but requests for tax relief via Standard Refund can be submitted until the end of the 3rd year after the payment date.
Acupay can assist with processing and filing tax reclaims with the Swiss tax authorities (Eidgenössische Steuerverwaltung or ESTV) and will oversee the process, until the excess withholding tax is refunded.
For more information on the Swiss Standard Refund process, please contact our Reclaims team.
Nothing in this document is intended to constitute financial, legal, or tax advice.