Local Law Changes


  • Dividend and interest withholding tax rates increased from 27% to 30%. Treaty eligible investors can avail of preferential withholding tax rates by filing tax reclaims.
  • Interest income from bonds held within the National Bank of Belgium’s (NBB) tax exempt account, will continue to avail of a withholding tax exemption.
  • Distributions from Belgian Regulated Real Estate Companies (REITs), subject to 30% withholding tax, which may be reduced pursuant to an applicable tax treaty with Belgium.
  • Distributions from Belgian REITs that allocate at least 60% of their investments to care units and health care buildings are subject to 15% withholding tax at source.
    • Aedifica BE0003851681;
    • Care Property Invest BE097423055.
  • The 33% speculation tax applied to gain resulting from stock transfers by individuals is abolished.
  • Extension of the tax on stock exchange to cover Belgian investors operating through foreign platforms.

INVESTOR IMPACT: Investors will be subject to the increased statutory withholding tax rate on Belgian income at source. BBH will continue to file treaty based tax reclaims on behalf of treaty eligible investors that provide proper documentation.



  • Dividend withholding tax rate applicable to legal entities increased from 5% to 10%, which may be reduced pursuant to a tax treaty with Bosnia and Herzegovina.

INVESTOR IMPACT: Required documentation in order to avail of tax treaty benefits is a certificate of residence (CoR) and a Declaration of Beneficial Ownership (DBO). The DBO form has not been issued by the tax authorities yet. Once the form is issued, BBH will make the necessary updates to notify its impacted clients of outstanding documentation.



  • Additional 5% withholding tax on gross dividends paid out of profits generated in 2017, payable in 2018.
  • The company paying the dividend is considered the withholding agent.
  • Treaty relief is generally not available to a non-resident investors.

INVESTOR IMPACT: Investors are subject to an additional 5% withholding tax on dividend distributions in 2018.



  • Statute of limitations for filing tax reclaims decreased from five years to three years.

INVESTOR IMPACT: Reduced statute of limitations applies to payments on or after January 1, 2017. Investors that wish to file reclaims for payments prior to January 1, 2017 can file under the old statute of limitations.



  • Dividend withholding tax rate increased from 10% to 15%. Treaty eligible investors can avail of preferential withholding tax rates at source by providing a country specific Claim for the Application of Treaty Benefits Form.

INVESTOR IMPACT: Treaty eligible investors are encouraged to provide a country specific Claim for the Application of Treaty Benefits Form in order to secure preferential dividend withholding tax rates at source.



  • Corporate tax rate decreased from 25% to 24% for tax year 2017; and to 23% for tax year 2018.
  • The corporate tax rate impacts taxation of certain investments in the market, such as interest payments with respect to short term government bonds, distributions from Israeli Real Estate Investment Trusts (REITs) and taxation of gains derived from the sale of government bonds.

INVESTOR IMPACT: Nonresident investors are subject to a decreased tax rate of 24% on interest with respect to short term government bonds, distributions from REITs and gains derived from the sale of government bonds. The rate will decrease again to 23% in 2018.



  • Reduction of the withholding tax rate applicable to dividends paid to European Union (EU) domiciled companies that are subject to corporate taxation from 1.375% to 1.20%.

INVESTOR IMPACT: Previously documented investors will avail of the preferential withholding tax rate at source. Undocumented, eligible investors should provide the necessary documentation to secure reduction at source.



  • Statute of limitation for filing tax reclaims increased from one year to five years.
  • Requirement to provide a certificate of residence to support treaty eligibility and local law exemption benefits.
    • The CoR will remain valid for three year.
  • Investors availing of the EU local law exemption must provide a statement confirming that there are no changes to their exemption status.
    • The statement will remain valid for three years.
  • Required documentation must be produced by January 1, 2018 and would be used in case of an audit by the Norwegian Tax Authorities.

INVESTOR IMPACT: BBH is in the process of implementing the new documentation requirements and validity periods. Once implemented, investors will be notified of outstanding documentation via their outstanding monthly documentation report.



  • Corporate tax rate increased to 29.5%.
  • Withholding tax rate applicable to dividends distributed from corporate income earned in 2017 and thereafter, reduced from 6.8% to 5%.
  •  Withholding tax rate of 6.8% will continue to apply to dividends paid out of earning generated between January 1, 2015 and December 31, 2016.
  • Temporary capital gains tax exemption extended from December 31, 2018 until December 31, 2019.
  • Additional securities are eligible for exemption, including convertible bonds, debt securities, REITs, and negotiable invoice.

INVESTOR IMPACT: Investors continue to avail of the temporary capital gains tax exemption, as well as exemption on disposition of additional security types which may now be eligible for the CGT exemption opportunity. Investors must notify CAVALI S.A. ICVL (central securities depository - acting as the withholding agent), through their local broker, that the sale transaction should be exempt.



  • European Union (EU) and European Economic Area (EEA) member state closed-ended investment funds will no longer benefit under the local law exemption on income derived from the following:
    • Polish and foreign transparent entities, that are not treated as legal persons or are subject to tax on income in their country of domicile (e.g. partnerships);
    • Interest from loans, capital contributions, or shares issued by Polish and foreign transparent entities;
    • Income resulting from disposition of securities issued by Polish and foreign transparent entities.

INVESTOR IMPACT: Law changes resulted in a requirement for eligible investment funds to provide new documentation to support the local law exemption, whereby the investment fund confirms whether it is an open-ended or closed-ended type of fund. BBH sent out documentation solicitation notices to all impacted clients. Documentation must be in place prior to the first income payment, otherwise reclaims can be filed.



  • Withholding tax on coupons from certain corporate bonds is reduced from 20% to 15%. The following requirements must be met:
    • Bond must be issued by Russian companies;
    • Recognized as on-exchange traded securities as of the date of the coupon interest;
    • Denominated in Russian roubles (RUB);
    • Issued between January 1, 2017 and December 31, 2021.

INVESTOR IMPACT: Treaty eligible investors are encouraged to provide the necessary documentation to support treaty benefits at source. In absence of documentation, the new 15% withholding tax will apply to interest from bonds meeting the above-listed criteria.



  • Dividends paid out of profits earned in 2017, to investors that are not domiciled in a country on Slovakia’s White List will be subject to a 35% withholding tax.
  • Dividends paid out of profits earned in 2017, to individual investors, regardless of domicile, will be subject to a 7% withholding tax.

INVESTOR IMPACT: Investors domiciled in countries not on Slovakia’s white list can anticipate the 35% withholding tax rate to apply to dividends paid in 2018.



  • Individual Spanish investors are subject to capital gains tax withholding on the transfer of subscription rights. The deposit company or the broker will act as the withholding agent.

INVESTOR IMPACT: Spanish individual must maintain segregated accounts in the market in order to allow for proper taxation on the transfer of subscription rights.



  • Nonresident investors are exempt from withholding tax on interest from government bonds and proceeds from redemption of discounted government bonds.

INVESTOR IMPACT: Nonresident investors can avail of a local law exemption on interest from government bonds and proceeds from redemption of discounted government bonds. Documentation is not required.



  • Withholding tax rate on interest from fixed income securities increased from 3% to 7% in the following cases:
    • Interest on long-term deposits (i.e., more than one year) in Uruguayan pesos and indexed units in local banks and financial institutions;
    • Interest on corporate bonds or other debt instruments with terms in excess of three years that are conducted by public subscription (i.e., public offer to buy shares or bonds issued by a company) and issued by listed resident entities;
    • Incomes derived from certificates of participation in listed financial trusts that are conducted by public subscription and have periods that exceed three years.
  • Tax rate on interest from short-term deposits (i.e., one year or less) in local banks and financial institutions in Uruguayan pesos without a readjustment clause increased from 5% to 7%.
  • Tax rate on income earned by certain entities domiciled in countries with low or no taxation increased from 12% to 25%.

INVESTOR IMPACT: Nonresident investors are subject to increased withholding tax rates on interest from Uruguayan fixed income instruments.


Introduction of New Investment Vehicles


SPECIALIZED REAL ESTATE INVESTMENT FUND – The Specialized Real Estate Investment Fund follows the same taxation regime as Belgian REITs. Nonresident investors are subject to a 30% withholding tax on distributions which may be reduced pursuant to a tax treaty with Belgium.



REAL ESTATE INVESTMENT TRUSTS – Real Estate Investment Trusts are exempt from corporate income taxation with respect to income resulting from the sale or lease of real estate and the sale of shares in other real estate investment trust and subsidiaries. It is anticipated that distributions will be subject to standard dividend withholding tax rules, where tax treaty rates will apply to distributions if properly documented.



RESERVED ALTERNATIVE INVESTMENT FUND – The Luxembourg Reserved Alternative Investment Fund (RAIF) is an unregulated vehicle but will still qualify for passporting under the Alternative Investment Fund Managers Directive (AIFMD). Two alternate tax regimes are applicable; the general tax regime (exemption from corporate income or other taxes in Luxembourg, except for a subscription tax) and the optional tax regime (tax rules partially depend on the underlying legal structure) which is applicable to RAIFs investing in risk capital. For both regimes there is no withholding tax on any distributions or tax on speculative capital gains for investors.



IRISH REAL ESTATE FUND – The IREF seeks to preserve Ireland’s taxing rights on income and gains sourced from Irish domiciled real estate. It is open to authorized unit trusts, authorized investment companies, Irish Collective Asset management Vehicle (ICAVs), certain investment limited partnerships and Qualifying Investor Alternative Investment funds (QIAIF), but excluding Undertakings for Collective Investment in Transferable Securities (UCITS). The IREF will apply a 20% withholding generally although there are specific withholding tax exempt investors. Where withholding tax does apply, investors resident in a country which has a DTAT with Ireland may be entitled to a reclaim depending on the terms of the DTAT, provided they hold less than 10% in the IREF.


Tax Treaty Changes

Note: The list of treaties provided below does not cover all treaty changes that became effective on January 1, 2017, but only those that resulted in a significant tax rate impact to investors domiciled in one or both of the contracting countries.

Tax Treaty Chart

*Treaty becomes effective in Hong Kong on April 1, 2017.
**Treaty becomes effective in India on April 1, 2017.
***Treaty becomes effective on April 1, 2017.

For more information,  please contact your relationship manager or the Global Tax Services Group.


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