Corporate action events
TREC: Tax Reclaim
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TREC is the event used to reclaim tax that was withheld in excess of the holder’s actual tax liability on an earlier dividend or interest payment. Holders take part by instructing and providing the documents; the refund is paid in cash.
- Code
- TREC
- Usually announced as
- VOLU
What TREC means
When a dividend or coupon is paid, tax is often withheld at the issuer country’s full rate. Holders entitled to a lower treaty rate or an exemption can reclaim the difference. TREC is the event through which the account servicer runs that reclaim and pays the refund (rate in :92a::TXRC, amount in :19B::TXRC).
The ECB SCoRE rulebook gives TREC as VOLU with CASH (claim the refund) and NOAC; Clearstream lists the same. In that rulebook the record date of a TREC is the payment date of the underlying income event on which the reclaim is possible.
When you see it
What to do next
- Check which beneficial owners are entitled to a refund and collect the required documents (residence certificates, forms) before the deadline. Reclaims are subject to statutory time limits.
- Instruct with an MT565 with the beneficial owner details if required, and reconcile the refund on the MT566 against the expected difference between the rate applied and the entitled rate.
Where it appears in MT and ISO 20022
MT (ISO 15022)
- MT564 sequence A (GENL),
:22F::CAEV//TRECwith:22F::CAMV//VOLU; sequence E2,:92a::TXRCand:19B::TXRC - MT565 and MT566 sequence A,
:22F::CAEV//TREC