Relief at source - Eligibility, documentation, deadlines - Portuguese equities - securities held in CBF

11.04.2023

Who can apply for relief at source?

Relief at source of withholding tax on dividends from Portuguese equities is available through LuxCSD for eligible beneficial owners, as follows:

Eligible beneficial owners

Rate applicable at sourcea

Residents of a Double Taxation Treaty (DTT) country

Tax treaty rateb

EU/EEA pension funds

0%

Non-resident of Portugal availing themselves the privileges and immunities enshrined in an international agreement or chart (central banks, government agencies and international/supranational organisations recognised by Portuguese law

0%

Non-resident of Portugal or DTT country applying for a reduced tax rate (25% or 28% rate)c

10%/7%

Portuguese residents eligible for tax exemption

0%

Portuguese residents applying for a reduced tax rate (25% or 28% rate)

10%/7%

a. Expressed as a percentage of the gross dividend amount.
b. Amount of relief will be 0% if the DTT rate exceeds 35%.
c. Residents of Tax Havens having a DTT in place with Portugal cannot benefit from the reduced 25%/28%.

In order to obtain partial or total relief at source from withholding tax on dividend payments for equities, the beneficial owners have to fulfil with the following reporting and documentation requirements:

Documentation requirements

In order to obtain partial or total relief at source from withholding tax on dividend payments for equities, the beneficial owners have to fulfil with the following documentation requirements:

All customers applying for tax relief must submit:

  • A One-Time Certificate for Portuguese Equities, that covers all the eligibilities for tax relief, that is, treaty benefits or domestic law benefits and gives the possibility of applying for a standing instruction:
    • If the customer holds the securities for themselves or for a single beneficial owner (first box); or
    • If CBF customers segregate their holdings per tax rate in their sub-accounts or in a dedicated account (second box).
And,

Customers holding the equities on behalf of several beneficial owners must submit before each relevant withholding event:

  • A breakdown of holdings, through an Xact Web Portal or Xact via Swift message.

In addition to the Beneficial Owners Disclosure and the breakdown of holdings, customers must provide the following documentation according to their status:

Residents of Double Taxation Treaty (DTT) countries (including Luxembourg SICAVs:

  • Form Mod. 21-RFI must be provided annually –accompanied by a separate Certificate of Residence (COR) valid one year, unless otherwise specified on the document and
  • Power of Attorney if Mod-21 RFI is not completed by the final beneficial owner.

The Mod-21 RFI expires on the last day of the period identified in the tax residence certificate. Exception: Valid until revoked for central banks and government agencies domiciled in a country that has a DTT in force with Portugal.

In addition to the above, the following documentation is requested for DTT residents according to their status:

Funds / Trusts:

  • Statement for Funds: Declaration issued by the trust’s/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, the beneficiary undertakes full responsibility to update information and amend the declaration if need be should there be any relevant fact changes

OR

For 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

OR

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.

OR

For Swiss pension funds
  • Statement for Swiss pension funds: Declaration issued by the pension fund’s local authorities certifying that the respective entity is
    • a pension fund in which individuals participate to secure old-age, disability and survivors' insurance and
    • 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.

OR

For EU/EEA pension funds (other than Liechtenstein) – Income not attributable to a Portuguese-situs Permanent Establishment

  • Declaration for EU/EEA pension funds duly completed and signed by the respective supervisory authority is valid for a period of one (1) year counting from the respective date of issue and must be received by LuxCSD in original.
  • Self-Declaration of holding period duly completed and signed by the pension fund being the final beneficial owner must be sent in original before each dividend payment. It must confirm since when the pension fund holds the Portuguese equities uninterruptedly.

Non-resident of Portugal availing themselves the privileges and immunities enshrined in an international agreement or chart (central banks, government agencies and international/supranational organisations recognised by Portuguese law)

Portuguese residents eligible for tax exemption Portuguese entity not subject to withholding tax, in accordance with Portuguese legislation

  • Self-Declaration for Tax Exemption/Reduced Rates on Portuguese Bonds and Equities Beneficial Owner Resident in Portugal
  • Other than automatic exemptions, documentation attesting the specific exempt status.

 Non-residents of Portugal applying for a reduced tax rate

  • Self-Declaration for Tax Exemption/Reduced Rates on Portuguese Bonds and Equities Beneficial Owner Resident in Portugal, certifying that the entity is resident in a country or jurisdiction other than the Portuguese Republic, with no permanent establishment located in Portugal to which any Portuguese-source income could be attributable and its country of residency is not considered a tax haven. For instance, it is not a country, territory or region with a clearly more beneficial tax regime, according to the official list approved by the Decree of the Portuguese Minister of Finance 150/2004 of 13 February 2004.

Residents of Portugal applying for a reduced tax rate

  • Self-Declaration for Tax Exemption/Reduced rate Beneficial Owner Resident in Portugal, certifying that the entity is eligible for the application of a reduced tax rate (25% or 28%, applicable respectively to corporate entities or individuals).

Deadline for receipt of documents

The relevant documentation for relief at source of withholding tax on dividends from Portuguese equities must be received by LuxCSD at least three business days before the payment date of the respective payment by 10:00 CET

Form descriptions are presented according to the procedures available for relief and/or reclaim of withholding tax on income from Portuguese equities.

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