Clearstream Banking1 informs customers that the dividend distributed from Ericsson DR US2948216088 with a record date of 1 October 2021 is subject to 30% Swedish withholding tax as standard in Clearstream Banking.
Customers can, however, benefit from a quick repayment to their underlying beneficial owners according to the tax procedure for Swedish depository receipts (DR).
Eligible real owners
Quick repayment is available for the following types of real owners:
Residents of a double taxation agreement country (DTT); and
Tax-exempt U.S. pensions under IRS sections 401 (a), 501 (a) and 457 (b) (0%); and
Tax-exempt Canadian and Swiss pensions (0%); and
Tax-exempt companies for collective investment in transferable securities (UCITS) domiciled in an EU Member State.
In order to receive a quick refund from Swedish withholding tax, customers must submit the following documentation to Clearstream Banking:
Instruction per payment
One instruction per payment, for each tax rate required,via SWIFT or Xact Web Portal message (for complete formatting requirements, see Customer Handbook or Announcement D18075).
The instruction must contain:
Customer account number
Corporate Action ID;
Tax rate and number of DRs to apply per each real owner;
The name of the real owner;
The real owner’s address for tax purposes;
Country of residence for tax purposes (ISO two-letter code);
Tax identification number;
The total holding that remains secret, if applicable.
In addition, the following statement must be included in the instruction per payment if customers provide instructions on behalf of tax-exempt U.S. pensions under IRS sections 401 (a), 501 (a) and 457 (b) (0%):
“we, [name of Clearstream Banking customer], hereby confirms that each US pension mentioned below meets the following tax recovery requirements:
the pension fund / trust is:
1. Organized under the laws of the United States
2. established and maintained in the United States primarily for the purpose of administering or providing pensions or other similar compensation, including social security contributions.
3. tax exempt in the United States in respect of the activities described in paragraph 2 above.
4. consists of participants in the fund, of which more than 50 percent are resident in the United States.
5. resident in the United States, provided that such dividend does not derive from the fact that the pension fund or an associate conducts a trade or business.
6. confirm that the underlying security has been held in the account for at least two months before the tax refund is submitted to Globetax. If the shares are part of a securities lending transaction over the record date, the two-month holding period is considered to be interrupted and as a result the pension entitlement to claim the tax-exempt interest rate is disqualified.“
Additional specific documentation for the real owner
In addition to the instruction per payment, customers are encouraged to refer to the original DTCC notice to see the exact eligibility criteria and the specific documentation requirements that apply to each eligible beneficial owner.
For complete information on these requirements, see the original DTCC message available from DTCC website (CUSIP / Security name can be used to retrieve the message).
Customers are strongly encouraged to receive this message to ensure that they are aware of and meet the full requirements for this event.
All necessary documentation (except the instruction per payment) must be sent to the following address:
Clearstream Operations Prague sro
Attn: PTR – Tax Services
Futurama Business Park Building B
Sokolovska 662 / 136b
CZ-18600 Prague 8
To take advantage of a quick refund of the above security, customers must ensure that Clearstream Banking receives the documents described above no later than 10:00 CET on October 27, 2021.
If no instructions and certificates, if any, have been received before the prescribed deadline, Clearstream Banking will apply the maximum withholding tax rate for withholding tax for the applicable dividend.
Clearstream Banking will not take any responsibility for any losses, claims, penalties, taxes and interest on these due to the fact that the customer has not taken any action regarding the above matter or receipt of documents after the specified deadline.
The Clearstream Banking customer is always responsible for ensuring that the final beneficial owners are entitled to the tax rates applied for, including Clearstream Banking’s standard interest rate. Neither Clearstream Banking nor its local custodian or operator has any direct or indirect liability to the Swedish authorities in this regard.
In addition, if Clearstream Banking is informed after the above-mentioned instruction deadline that a beneficial owner has received a quick refund to which they are not entitled (for example due to incorrect rights, data, certification, etc.), Clearstream Banking will not assist in containing the tax or return it to the respective tax authority.
For more information, please contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services or your Relationship Officer.
1. This notice is published by Clearstream Banking AG (CBF), established at Mergenthalerallee 61, 65760 Eschborn, Germany, registered in the Commercial Register of the District Court of Frankfurt am Main, Germany, under number HRB 7500.