2016 Operational Updates
Acupay 6166 Wizard
October 2016: Application for an IRS Form 6166, the U.S. Certificate of Residence
In December 2016, the Internal Revenue Service (IRS) will begin accepting applications for U.S. tax residency certifications for the tax year 2017. We would therefore like to remind you of Acupay’s innovative online solution for U.S. tax residency certifications, the Acupay 6166 Wizard.
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 IRS on an IRS Form 6166, which is obtained by completing a Form 8802. The process of completing and submitting Form 8802 to the IRS is notoriously complex.
Using the Acupay 6166 Wizard instead, offers a smoother and faster experience, usually taking no more than 5 minutes. Once the form has been submitted to us, we will handle all interactions with the IRS so that each 6166 request is processed in a timely manner by the IRS (historically, about 4-6 weeks). We are proud of our 99% rate of successfully processed 6166 applications.
For more information on the Acupay 6166 Wizard, please contact the A-Team.
Belgium
October 2016: Delhaize Group S.A. ADRs (US29759W101) Deadline Reminder - Tax Reclaim Submissions for Tax Year 2012
Following the merger of Delhaize and Ahold, we will continue to assist Delhaize ADR holders with recovering excess withholding tax on past dividend payments from the Belgian tax authorities.
The statutory deadline for Belgian standard refunds is 5 years from January 1st of the year in which the dividend payment occurred.
Therefore, the deadline to submit tax reclaim requests for the 2012 dividend payment is December 31, 2016. To ensure timely filing with the Belgian tax authorities, the deadline to submit in the Acupay System is November 21, 2016.
For enquiries regarding reclaiming excess tax on other Belgian dividend or interest payments, please contact our Reclaims team.
May 2016: Delhaize Group S.A. (29759W101 / US29759W101) Upcoming Dividend Payment
Delhaize Group S.A. has reported that its next cash dividend payment is due to take place on June 7, 2016 (RD: June 1, 2016). Under Belgian law, dividends paid to holders of Belgian American Depositary Receipts (ADRs) are subject to income taxes of 27%.
Most non-Belgian shareholders are eligible for a reduced rate of tax Based on the double taxation agreement legislation.
To assist shareholders in obtaining a reduction in Belgian withholding tax, Acupay will be providing a tax relief service via its automated tax processing platform. From June 2, 2016 until June 6, 2016 (8PM EDT), U.S. resident investors will have the opportunity to submit their tax relief instructions via Quick Refund. All beneficiaries resident in other jurisdictions will have to apply for a Standard Refund.
A DTC Important Notice providing full details of the tax relief filing procedures and documentation requirements will be distributed by Acupay once all details pertaining to the 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.
Czech Republic
October 2016: Czech Withholding Tax - Tax Relief Service
Acupay now supports tax relief services on Czech shares. Holders of Czech equities who have been unduly taxed at source on dividend payments can recover the excess withholding tax by contacting Acupay.
Non-resident beneficial owners subject to 35% withholding at source can benefit from a reduced rate under the applicable tax treaty. Tax relief applications can be submitted to the issuer and the local paying agent via Acupay until 60 days after the dividend payment.
Czech tax reclaims are particularly difficult since the Czech authorities have not published any official procedures. Acupay collaborates with a local law firm to ensure all reclaims are processed as smoothly and quickly as possible.
If you are interested in finding out how to lodge a claim in the Czech Republic, please contact our Reclaims team for more information.
Denmark
May 2016: Potential Decrease in Dividend Withholding Tax Rate
On February 23, 2016, a law proposal was submitted to the Danish Parliament that included a potential decrease in the dividend withholding tax rate from 27% to 22%. According to the proposal, this reduction will be available via Standard Refund, and will only apply to corporate investors. Since this has yet to be ratified, we will inform you as more information becomes available.
Finland
June 2016: Proposed New Statute of Limitations on Standard Refunds
The Finnish government has proposed a reduction to the Statute of Limitations period for filing reclaims of withholding tax from 5 years to 3 years. For example, a Finnish dividend that pays in 2016, where withholding tax is deducted, can be reclaimed until the end of 2021. A Finnish dividend that will pay in 2017, where withholding tax has been deducted, can be reclaimed until the end of 2020. This proposal is due to become effective starting on January 1, 2017
Germany
October 2016: 2016 DTV Submission Deadlines
Acupay offers an electronic link to the German tax authorities (the “BZSt”) allowing custodians to submit reclaims on German shares, including American Depositary Shares (“ADSs”), directly via the Acupay System with minimal or no upfront paper documentation, depending on the type of investor.
For the 2016 German dividend season, the deadlines for custodian banks to submit quick refund requests through the Acupay System are approaching soon!
For more information, please contact the D-Team.
March 2016: New Treaty Rate for Dutch-Resident Pension Funds
The new treaty between Germany and the Netherlands entered into force on December 1, 2015, and applies as from January 1, 2016. This replaces the existing 1959 Treaty. The current tax rate of 15% on dividends remains unchanged; however a rate of 10% will apply if the beneficial owner is a Dutch-resident pension fund.
March 2016: Withdrawal of DTV Platform for Dutch and French Pension Funds
The German Tax Authorities (BZSt) has announced that, as from January 1, 2016, both Dutch and French pension funds will no longer be able to submit German reclaims through the DTV – German Electronic Relief Program.
For Dutch pension funds, this is due to the change in the tax rate between the Netherlands and Germany, as the DTV system is not set up to reflect the change. Additionally, there is no consensus on the type of evidence required to classify it as a pension fund. French pension funds are restricted from using the DTV due to additional eligibility requirements. Please note that a long form reclaim opportunity will still be available in both cases.
For further information please contact the D-Team.
January 2016: Suspension for Dutch Pension Funds
The German Tax Authority (BZSt) have advised that since the 1st of January 2016, due to a change in the tax treaty between the Netherlands and Germany, tax reclaims for Dutch Pension Funds cannot be submitted by the DTV (Electronic filing) method. This is because there has been no consensus as to the type of evidence required to classify Dutch Pension Funds for the favourable tax rate. Until further notice and such time as the evidence required is clarified between Germany and the Netherlands, tax reclaims for Dutch Pension Funds can only be made by way of a Long Form Reclaim.
Acupay will monitor the situation and send further updates when received.
Israel
October 2016: The Israel Electric Corporation Limited - Upcoming Payment Date
46507MAD4 / US46507MAD48
46507MAE2 / US46507MAE21
46507NAD2 / US46507NAD21
46507NAE0 / US46507NAE04
The Israel Electric Corporation is the first Israeli company to issue debt using the Acupay System for cross-border tax relief. The Acupay System evaluates foreign investors’ holdings so that they can be paid interest exempt from Israeli withholding tax, in accordance with the requirements of Israeli tax laws and regulations.
The next interest payment date is expected to take place on December 21, 2016. To receive the favourable tax treatment, DTC Participants must certify their holders’ tax residence in the Acupay System and make a matching instruction via DTC’s CA Web service.
Acupay System opens for certification: December 7, 2016 (9am EST)
Acupay System closes for certification: December 20, 2016 (8pm EST)
Indirect DTC Participants (including participants in Euroclear and Clearstream) need to follow the tax relief procedures set out by their custodian. Please be aware that your custodians will likely set deadlines well before Acupay’s deadline.
May 2016: The Israel Electric Corporation Limited - Upcoming Interest Payment
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, 2016. Interest on these notes is generally subject to Israeli withholding tax, with the following exceptions:
Non-Israeli beneficial owners
Regulated Israeli financial institutions
Israeli tax residents with an Israeli Certificate of 0% Withholding
DTC participants may obtain exemption from 25% 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 opens for certification: June 7, 2016
Acupay closes for certification: June 20, 2016 (8PM EDT)
(Be aware that if you hold your Notes outside of DTC, your custodian may 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 that are set by their custodians. To ensure timely submission of your instruction(s) to upstream financial intermediaries, please be sure to follow these deadlines as set out by your custodian.
Tax rates and instructions on how to submit for tax relief can be found on the Acupay website.
February 2016: Amendment of Israeli Corporate Tax
Amendment 216 of the Israeli Tax Ordinance reduces the Israeli corporate and withholding tax rate on interest from 26.5% to 25% as of 1 January 2016. As such, Israeli tax resident corporations (other than financial institutions) and beneficial owners of other jurisdictions that have not followed the procedure in a timely manner will pay the amended tax rate of 25% going forward.
Italy
October 2016: Italian Yankee Bonds Upcoming Payments and Impact of White List Change
As a reminder, the new Italian White List now includes 123 markets, having added 51 new countries such as Switzerland, Hong Kong, Bermuda, the Cayman Islands, Jersey (Channel Islands), the British Virgin Islands, and Taiwan. The latest version of the Italian White List is available on the Acupay website.
Eligible holders domiciled in a white-listed jurisdiction may receive their coupons gross of tax as long as they follow the tax compliance procedures contained in the ‘DTC Important Notices’ published on the Acupay website.
DTC Participants holding net-paying CUSIPs (or “N Receipts”) on behalf of eligible investors domiciled in newly white-listed countries should note that these CUSIPs will have to be transferred into gross-paying CUSIPs (or “X Receipts”) in order to receive tax exempt treatment on any upcoming interest payment dates. For more information, please follow the instructions laid out in the DTC Important Notice or contact the A-Team at +1 212 422 1222.
February 2016: X Receipt and X Security Transfers - Enel S.p.A. and Telecom Italia S.p.A. Yankee Bonds
We are proud to announce that we completed our first X Security to X Receipt Transfer in January 2016!
For those of you who are not aware, for the Enel and Telecom Italia Yankee bonds that Acupay services as tax compliance agent, an X Security Transfer makes it possible to transfer holdings in the X Security (IT ISIN) held directly through Monte Titoli, via another clearing system such as Euroclear or Clearstream, to DTC as the X or N Receipts (US ISINs / CUSIPs).
To move positions into the X Security, holders of the X or N Receipts would simply need to complete either an X or N Receipt Transfer Request form, depending on the receipts they hold.
X Security, X Receipt, and N Receipt Transfers for the Enel and Telecom Italia Yankee bonds can take place on any NY business day except for the period between the record date and the related interest payment date. You can submit any Transfer Requests on the Acupay System.
These transfer mechanics provide additional flexibility so that investors can hold these bonds in the clearing system of their choice.
A summary of documentation requirements and deadlines for such transfers can be found on our website. You can also request more information from Acupay’s A-Team.
Spain
June 2016: Standard Refund for Telefonica S.A.
BBVA Spain has introduced an additional charge of €200 per tax reclaim, per beneficial owner with respect to the late submission of documentation for Spanish Standard Refunds. This is to compensate for additional processes that have to be conducted outside of the normal procedure.
April 2016: Telefonica S.A. ADR (ISIN: US8793822086) - Q2 2016 Cash Dividend Payment
Telefonica S.A. has announced its Q2 2016 cash dividend payment which is to be approved by shareholders at the Annual General Shareholder’s Meeting due to take place on May 11, 2016 or May 12, 2016. The record date will be May 18, 2016 with an ordinary payable date of May 19, 2016. At the request of Telefonica S.A., Citibank (as ADR Depositary) has arranged with Acupay to provide a tax relief service to assist holders of Telefonica ADR in obtaining a reduction in Spanish withholding tax (currently 19%). 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 cash 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.
April 2016: Change to Validity of Certification Documentation – Additional Information
As reported in our March Newsletter, in relation to the validity period of the Spanish Certificate of Tax Residency (COTR) and the Annex VI form, the Spanish Treasury has confirmed that the validity criteria has been applicable since January 2015.
There is still, however, ambiguity as to the exact date that this new rule was implemented. As such, all Standard Refunds that have been processed during 2015 and Q1 2016 which are still pending to be refunded by the Spanish Tax Authorities are being checked together with the Local custodian(s). This is to ensure that the COTRs and the Annex VI forms meet the new validity criteria. We will continue to monitor the situation and advise if new information transpires.
Please be aware that the change to the validity criteria will have an impact on the above-mentioned Telefonica ADR dividend payment as the tax year stated on the COTR now takes precedence over the issuance date. For example, if a U.S. COTR (Form 6166) was provided for the previous Telefonica ADR dividend payment with tax year 2015 stated, it will not be valid for the upcoming payment in 2016, regardless of if it was issued within a year of the local PD. This is what the certificate’s validity was previously based on for Relief at Souce and Quick Refund. For it to be considered valid for the May 2016 Telefonica ADR dividend payment, the COTR would need to state that the certification is for tax year 2016.
If you have questions relating to the above, please contact the A-Team.
March 2016: Change to Validity of Certification Documentation
The Spanish Treasury has advised that the validity period of Certificates of Tax Residency (COTR) and the Annex VI form have been amended. As such COTRs and Annex VI forms that in the past were valid from the date of issuance for one year will now expire at the end of the year of issuance irrespective of the issuance date.
If the COTR or Annex VI form has a specific period stated, i.e. February 15, 2016 to September 26, 2016, the validity period will be February 15, 2016 to September 26, 2016 even if the issuance date was January 4, 2016.
If the COTR or Annex VI form has a specific tax year stated, i.e. 2015, it will be valid from January 1, 2015 to December 31, 2015, even if it was issued on February 4, 2016.
We are awaiting confirmation of the date that the change became effective and will communicate this in due course
January 2016: New Double Taxation Treaty: Spain - Andorra
The new Double Taxation Treaty (DTT) signed between Spain and Andorra will become effective on the 26th of February 2016.
From the 26th of February 2016 onwards, as per Article 10, a resident in Andorra will have the right to not be withheld in Spain with more than 15% in respect to dividends, except for the following case:
If the Beneficial Owner (BO) is a legal entity resident in Andorra with at least 10% stake in the Spanish company which distributes the dividends, will from the 26th of February 2016 have the right to not be withheld in Spain with more than 5%.
From the 26th of February 2016 onwards, as per Article 11, a resident in Andorra will have the right to not be withheld with more than 5% in respect to interest.
Nothing on this page is intended to constitute financial, legal, or tax advice.