Corporate action events
WTRC: Withholding Tax Relief Certification
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WTRC is the certification process through which holders document their tax status so that withholding tax on an income payment is reduced or waived at source. It is voluntary: holders who do not certify are taxed at the default rate.
- Code
- WTRC
- Usually announced as
- VOLU
What WTRC means
Many markets apply reduced withholding tax only if the account servicer receives proof, before the payment, of who the beneficial owners are and where they are resident. WTRC is the event that asks for that information, usually as a breakdown of the position by beneficial owner or by tax rate category.
The ECB SCoRE rulebook and Clearstream give WTRC as VOLU with NOAC and BOBD, the ISO 20022 option for a breakdown of beneficial ownership. In the MT564, certification requirements appear as the certification flag (:17B::CERT), the certification type (:22F::CETI) and the deadline for tax breakdown instructions (:98a::TAXB).
When you see it
- In an MT564 linked to an upcoming DVCA or INTR, with the certification deadline and the list of rates or categories available.
- WTRC vs TREC: WTRC gets the reduced rate at source, before payment; TREC reclaims excess tax after payment. WTRC vs CERT: CERT is the specific non-US beneficial ownership certification for exchanging temporary into permanent notes.
What to do next
- Collect the beneficial owner breakdown and any required tax forms, and send the instruction before the tax breakdown deadline; late certifications normally mean the full rate applies and a TREC is needed later.
- On the payment, check in the MT566 that the withholding rate applied matches the certified categories.
Where it appears in MT and ISO 20022
MT (ISO 15022)
- MT564 sequence A (GENL),
:22F::CAEV//WTRCwith:22F::CAMV//VOLU; sequence D,:98a::TAXB; sequence E,:17B::CERTand:22F::CETI - MT565 sequence A,
:22F::CAEV//WTRC