Finland: Tax process for Finnish Treasury bills denominated in EUR (zero coupon notes issued through LuxCSD as issuer CSD)
LuxCSD1 informs clients that effective
immediately
the following tax procedures are applicable to Finnish Treasury bills denominated in EUR (zero coupon notes issued through LuxCSD as issuer CSD). This is in conjunction with Announcement L25004.
Default withholding tax rates for undisclosed beneficial owners
Nominal interest is not paid on Finnish Treasury bills denominated in EUR (zero coupon notes issued through LuxCSD as issuer CSD). Holders will however receive redemption proceeds at either early or final maturity, which, by default, is subject to 30% withholding tax on the full redemption amount unless tax documentation is provided as described in the below procedures.
Relief at source
Eligible beneficial owners
The following beneficial owners are eligible to obtain relief at source from withholding tax on dividend payments on publicly listed Finnish equities:
Beneficial owner type | Tax rate |
Non-residents | 0% |
Finnish legal entities | 0% |
Finnish individuals | 30%a |
Undisclosed | 30% |
a. Even if clients hold Finnish Treasury bills denominated in EUR (zero coupon notes) on behalf of a Finnish tax resident individual beneficial owner who is subject to the maximum default withholding tax rate of 30% through LuxCSD, the respective client must disclose to LuxCSD the details of the individual beneficiary resident in Finland as disclosure is required for reporting purposes.
Documentation requirements
In order to obtain relief at source on behalf of eligible beneficial owners, clients must submit the following documentation to LuxCSD by the relevant deadlines:
One-Time Certificate for Finnish Treasury bills denominated in EUR (zero coupon notes issued through LuxCSD as issuer CSD)
The certificate must be completed by the client and remains valid until revoked.
Per-payment instruction
In addition to the One-Time Certificate, the following type of beneficial owner must also send a per-payment instruction.
Applicable box ticked in One-Time Certificate | Beneficial owner type(s) |
B.2 | Several beneficial owners
|
The per-payment instruction must be submitted via an MT565 Corporate Action Instruction message in Xact via Swift or a Corporate Action Instruction in Xact Web Portal.
The per-payment instruction must be provided for each beneficial owner, and must include:
- LuxCSD account number;
- ISIN code;
- Corporate Event ID;
- Total holdings;
- Requested tax rate;
- Number of securities to which the requested tax rate applies.
In addition, the following information is required in the per-payment instruction, depending on the beneficial owner type, as shown below:
Beneficial owner details | Xact via Swift (Sequence C: BENODET) | Xact Web Portal (Section: Beneficial owner details) |
All beneficial owners | ||
Legal status:
| :70E::CETI | Narrative |
Finnish resident legal entities only | ||
Full name | :95V::OWND | Party |
Country of tax residence (Finland) | :94C::DOMI | Country of domicile |
Finnish Business ID | :95S::ALTE//TXID | BO TIN |
Finnish resident individuals only | ||
Full name | :95V::OWND | Party |
Country of tax residence (Finland) | :94C::DOMI | Country of domicile |
Personal ID (individuals only) | :95S::ALTE//TXID | BO TIN |
For full formatting requirements of these instructions, clients should refer to the MT564 Corporate Action Notification message and to the Xact via Swift User Guide.
Deadlines for receipt by LuxCSD
The deadlines for the submission of the documentation to obtain relief at source from withholding tax on redemption payments on Finnish Treasury bills denominated in EUR are as follows:
Document | Relief at source |
One-Time Certificate for Finnish Treasury bills denominated in EUR (zero coupon notes issued through LuxCSD as issuer CSD) | Three days prior the first redemption payment date, by 10:00 CET. |
Per-payment instruction | Three days prior the redemption payment date, by 10:00 CET. |
Quick refund
A quick refund is available for eligible beneficial owners, if relief of withholding tax has not been obtained at source.
To apply for a quick refund of withholding tax on redemption payments, the same documentation requirements are applicable as for the relief at source process, except all clients must send a per-payment request.
Deadline for receipt by LuxCSD
Document | Quick refund |
One-Time Certificate for Finnish Treasury bills denominated in EUR (zero coupon notes issued through LuxCSD as issuer CSD) | By 10:00 CET on the third calendar day (or the first business day thereafter if the third calendar day is not a business day) of the month following the redemption date. |
Per-payment instruction | By 10:00 CET on the third calendar day (or the first business day thereafter if the third calendar day is not a business day) of the month following the redemption date. |
Standard refund
No standard refund is available through LuxCSD.
Clients are therefore strongly recommended to provide the required certification as soon as possible and prior to the relevant deadlines.
Impact on clients
Clients wishing to apply for a relief at source or quick refund on behalf of eligible beneficial owners are required to provide certification in accordance with the procedures described above.
Further information
For further information, please contact the Tax Help Desk, LuxCSD Client Services or your Relationship Officer.
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1. LuxCSD refers to LuxCSD S.A., registered office at 42, Avenue J.F. Kennedy, L-1855 Luxembourg, registered with the Luxembourg Trade and Companies Register under number B-154.449.