Clearstream Banking Frankfurt launches tax data transfer service

Source: Clearstream

Clearstream Banking Frankfurt (CBF) is launching Taxbox, a new service that will support the transfer of tax-relevant data between its customers so that they can fulfill their legal requirement to exchange this data efficiently via a straight-through process.

As of 1 January 2009 the "Corporate Tax Reform 2008" ("Unternehmensteuerreform 2008") will become effective in Germany. Among many other rules it will require that German banks holding securities deposits for their retail customers provide certain data (information on the underlying buying transaction(s) of the position and possibly data on earlier losses/costs of the private investor) to the receiving bank when the customer deposit is transferred. Thus the receiving bank will be able to correctly compute the new flat rate tax ("Abgeltungssteuer") on capital gains. The law only states that these data must be provided, it does not say how. Due to the sheer number of those transactions in the German retail capital market, manual processes were out of question.

Taxbox is a service developed and provided by Clearstream Banking Frankfurt as a neutral entity to all groups active in retail banking, i.e. savings, cooperative or private banks. Its features were developed in a series of meetings with representatives of all major banking associations of the German market place and it is based on CBF's proven processing technology. Moreover, new customers such as investment funds companies ("Kapitalanlagegesellschaften") will benefit as the service also helps them to fulfill their legal requirements in an efficient manner.

Andreas Wolf, CEO of CBF said: "Taxbox is a good example of how Clearstream can work together with its customers to deliver in record time an efficient and useful service".

Christoph Klingenbeck, member of the board, Union Investment Service Bank AG said "The introduction of a flat rate tax on income and gains from capital investments is a challenge for banks and investment funds. Specifically for depository transfers CBF quickly and flexibly provided a solution in close coordination with the market, to enable the required transfer of underlying buying data and related losses."

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