Withholding tax on dividends
Shareholders who are residents in Iceland for tax purposes
Shareholders that are residents in Iceland for tax purposes are subject to income tax in Iceland on any income from shares in Marel in accordance with Icelandic tax laws. The applicable tax rate depends on the tax status of the shareholders.
The Company is required to withhold a 22% tax on dividend payments made to shareholders that are Icelandic tax residents, subject to certain exemptions. Such withholding is considered a preliminary tax payment, but does not necessarily constitute the final tax liability of the shareholder.
- Individuals are subject to a final 22% tax on dividend payments.
- Limited companies (e.g. ehf. and hf.) enjoy an effective participation exemption, allowing them to deduct the full amount of the dividend payments received. As a result, limited companies may recover the tax on dividend payments withheld upon tax assessment.
Shareholders who are not residents in Iceland for tax purposes
Income received from shares in Marel by any person or entity not a resident in Iceland for tax purposes constitutes taxable income in Iceland. The Company is required to withhold the applicable tax on dividend payments and for shares listed on Nasdaq Iceland held by shareholders who are not resident in Iceland for tax purposes the withheld tax percentages are as follows:
- Individuals are subject to 22% tax on dividend payments.
- Legal entities are subject to 20% tax on dividend payments.
The tax liability may be reduced under applicable tax treaties.
Individuals and legal entities holding shares listed on Euronext Amsterdam
Shareholders holding shares listed on Euronext Amsterdam hold their shares under the Dutch giro system and are not registered in Marel’s share register in their own name. The Company will therefore withhold 22% withholding tax on all dividend payments to shareholders/beneficial owners of shares listed on Euronext Amsterdam.
Refund process for non-resident shareholders
Shareholders that are subject to a lower tax rate than 22% according to a double-taxation treaty can obtain a confirmation from the Icelandic Tax Authorities (Icel. Ríkisskattstjóri or RSK) regarding the applicable treaty protection. The confirmation is obtained via a filing of the Icelandic tax form RSK 5.42. Relief via a refund in line with an applicable tax treaty is carried out via a filing of Icelandic tax form RSK 5.43.
Limited liability companies resident in the EEA, a state party to EFTA or in the Faroe Islands
Irrespective of the availability of any tax treaty relief, limited companies resident in the EEA, a state party to EFTA or in the Faroe Islands enjoy an effective statutory participation exemption comparable to the one applicable to Icelandic entities, allowing them to deduct the full amount of the dividend payments received. This exemption does not apply at source, but requires the filing of a tax return in Iceland to obtain a refund of taxes withheld.
The information provided in this summary is of a general nature. Shareholders are advised to consult their tax advisers as to their tax position, exemptions, reductions or other issues that may pertain to their payment of taxes on dividend. Marel takes no responsibility for the information herein, that can be incomplete, incorrect, outdated and subject to change. It relates only to the position of persons who are the absolute beneficial owners of shares in Marel.