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Clearstream Banking SA

07/25/2017 | Press release | Distributed by Public on 07/25/2017 04:26

Italy: Tax impact of spin off Fiat Chrysler Automobiles NV shares (NL0010877643) and Gedi Gruppo Editoriale (IT0001398541)

Clearstream Banking would like to inform customers that the spin off event (corporate action event: AC6568434) involving Fiat Chrysler Automobiles NV shares (NL0010877643) and Gedi Gruppo Editoriale (IT0001398541) is subject to 26% Italian withholding tax and, if applicable, to 15% Dutch tax.

Specific tax impacts

For Dutch residents

Shareholders who are physically resident in the Netherlands, with a stake of less than 5% are also subject to withholding tax of 15% of the gross distribution amount determined by the 'Normal Value after the spin-off'.

For U.S. persons

A 'U.S. person', as defined in Rule 902 of Regulation S under the United States Securities Act of 1933, is, without limitation, (a) a natural person resident in the United States; (b) a partnership or corporation organised or incorporated under the laws of the United States; (c) a trust of which any trustee is a U.S. person; or (d) an agency or branch of a foreign entity located in the United States.

The issuer has confirmed that the Gedi Gruppo Editoriale (IT0001398541) shares cannot be held by shareholders deemed to be U.S. persons. The shares credited to 'U.S. persons'' were delivered to the event's paying agent, BNP Paribas, who sell the shares and credit the shareholders with the proceeds.

Gedi fractions

The cash paid in lieu of fraction on Gedi shares credited to 'U.S. shareholders' are subject to tax using the values indicated.

Further details about this event as well as an example using the calculation method are available upon request via email to [email protected] stating in the subject OTL FCA 050717.

General taxation process

Customers who chose the option cash (or who received cash by default)

The cash amount will be paid net of 41% withholding tax.

No tax service is offered and customers wishing to obtain a refund should liaise directly with Globetax or with the Dutch or Italian tax authorities.

Customers who chose the option 'stock'

Italian tax will be withheld by Clearstream Banking upon disclosure of the following beneficial owner details:

  • Name of the final beneficiary;
  • Country of residence;
  • Holding;
  • Tax Identification Number (TIN) of the Beneficial Owner (BO);
  • Average price of the Fiat Chrysler Automobiles NV share (ISIN NL0010877643);
  • Tax rate to be applied (by default 26% will be applied for undocumented beneficiaries).

In addition, and in line with the operating instructions given on behalf of InterimCo, Clearstream Banking requires to receive the following information from BO being Dutch residents no later than 26 July 2017:

  • Name and surname or company name of the recipient;
  • Residence address;
  • Dutch tax code (BSN or VAT code);
  • Number of Fiat Chrysler Automobiles NV shares held;
  • Securities account at Clearstream Banking where shares are held.

Please provide your instruction via SWIFT message to the attention of OTL within the below stated deadlines.

Clearstream Banking deadlines

The Clearstream Banking deadline for Dutch residents previously disclosed to our corporate action department is 26 July 2017 by 10:00 CET.

The Clearstream Banking deadline for all others is 27 July 2017 by 10:00 CET.

Debit of tax will be processed on 31 July 2017.

Note: Please be advised that the information statement is available on request by sending an email to [email protected] stating in the subject OTL FCA 05072017.

If no information is received, by default the 26% will be applied considering an average purchase price equal to zero.

Italian tax relief procedure

Please refer to hypothetical values for the spin off and withholding for the Italian residents calculation method.

There is a possibility for obtaining reduced rates of Italian withholding tax for Fiat Chrysler Automobiles NV shares for eligible beneficial owners that are:

  • Residents of a country having a double taxation treaty (DTT) with Italy (DTT rate will apply);
  • Incorporated as entity and subject to corporate income tax in their country of residency that is an European Union (EU) or European Economic Area (EEA) member state and listed in the Italian white list currently in force and if the amounts distributed refer to profits generated from the financial year 2008 onwards (1.20%);
  • An entity established as a pension fund and resident for tax purposes in an EU/EEA country included in the white list (11%); or
  • Supranational or international organisation recognised by Italian law (0%).

The availability of tax relief at 1.2% is defined based on the information received from Italian issuers prior to each dividend payment. If the unavailability of 1.2% is confirmed by the issuer, Clearstream Banking will inform customers accordingly and the certification already submitted for obtaining the 1.20% tax rate will not be processed.

Disclosure requirements

Clearstream Banking has the legal obligation to disclose the name of the beneficial owners, regardless of the tax rate applied, to the issuing company and the Italian tax authorities. For undisclosed positions the details of the account holder will be communicated.

For more details, please refer to our Market Taxation Guide - Italy.

Documentation requirements

In order to benefit from a relief at source of withholding tax on Italian dividends for eligible beneficial owners, customers must provide Clearstream Banking with the following documents:

  • One Time Certificate for Italian equities to be sent for each account in which equities are held where the customer certifies, among other things, whether the customer is holding the Italian equities on behalf of a single BO (box 1) or on behalf of several BO, including the customer if applicable (box 2). The certificate is valid until revoked by the customer. Any changes to the certified details must be communicated without delay.
  • A new One Time Master Instruction (OTMI) - dividend at source completed and signed by each BO or legal representative in which relief at source is requested at a specified rate. It is valid until revoked but any change regarding the BO or legal representative information (name, tax status, address, tax identification number) must be communicated without delay.
  • A certificate of residence per BO, issued by the relevant local tax authorities, to be submitted on a yearly basis. To request the 1.20 or 11% rate please use the template available in the Market Taxation Guide - Italy. Any variations from this template cannot be accepted.
  • For Italian equities: List of beneficial owners (where applicable). This BO list includes the respective holdings of these BO and the withholding tax rate applicable to the dividend payment of these BO requesting a reduced rate. Please note the remaining balance will be subject to the standard withholding tax rate. The BO list can be either sent via the BO Upload function, SWIFT or CreationOnline. Customers are advised that instructions sent by fax or email will not be processed.

Please send the original documents to the attention of:

PTR - Tax Services
Clearstream Operations Prague s.r.o.
Futurama Business Park Building B
Sokolovska 662/136b
CZ-18600 Prague 8
Czech Republic

Note: Customers that missed the Clearstream Banking deadlines may potentially apply for a standard refund to recover the tax withheld at source. However, customers should be aware that the requirements of the Italian tax authorities and interpretation of the applicable laws may be subject to change. In order to safeguard the interest of our customers and to avoid rejections of withholding tax reclaims, we strongly recommend customers to certify for tax exemption at source or via quick refund and to avoid the standard refund applications. Clearstream Banking cannot and does not accept to be held responsible for the acceptance or non-acceptance of tax reclaims by the Italian tax authorities.

Please note that the abovementioned is prepared for general information purposes only and is not intended to provide professional legal advice and should not be relied upon in that regard. Readers should seek appropriate professional advice. Clearstream Banking makes no guarantees, representations or warranties and accepts no responsibility or liability as to the accuracy or completeness of the information, and under no circumstances will it be liable for any loss or damage caused by reliance on any opinion, advice or statement made in the above, which is subject to change without notice.

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1. This Announcement is published by Clearstream Banking AG (CBF), registered office at Mergenthalerallee 61, 65760 Eschborn, Germany, registered with the Commercial Register of the District Court in Frankfurt am Main, Germany, under number HRB 7500.