Plus500 outlines withholding tax issues for $75 million dividend to be paid July 3

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CFD broker Plus500 Ltd (LON:PLUS) sets out below the process by which Plus500 will withhold tax on any dividends distributed by the Group, including with respect to the upcoming dividend, as set forth below.

On 7 February 2017, the Group announced a final dividend per share of $0.3799 ($43.6 million) and a special dividend per share of $0.2729 ($31.4 million) amounting to an aggregate dividend of $0.6528 per share (the Dividend), which traded ex-dividend on 2 March 2017. Payment of the Dividend will be made on 3 July 2017 to shareholders on the register as at close of business on 3 March 2017.

The complete Plus500 announcement reads as follows:

Withholding Tax Treatment

As set out in the Group’s Admission Document, with respect to dividends sourced from regular earnings, under the Israeli Tax Ordinance and regulations (ITO), the current Israeli rate of withholding tax on dividends paid by an Israeli company is 30% for distributions to a “substantial shareholder” (in general, being someone who holds, directly or indirectly, by himself or together with others, at least 10% of one or more of the means of control in the company) and 25% with respect to distributions to all other holders of Ordinary Shares (Withholding Tax).

Entitlement of Non-Israeli Tax Residents to a Reduced Rate of Withholding Tax

In order for a holder of depositary interests in respect of ordinary shares (DI holder), which is not an Israeli tax resident, to benefit from a reduced withholding tax rate under a tax treaty between Israel and the country of his/her residence, such as the UK, a shareholder must apply to the Israel Tax Authority (the ITA) and obtain from the ITA a certificate for a reduced withholding tax rate as set in the applicable tax treaty (the Certificate). In general, under the Double Taxation Treaty between Israel and the UK (the UK Treaty), a DI holder who is a British tax resident who holds less than 10% of the rights of the company and such dividend income is subject to tax in the UK and should be entitled to benefit from the UK Treaty, is entitled to a reduced withholding tax rate of 15% (the Reduced Withholding Tax Rate), provided the DI holder submits a duly issued Certificate prior to the payment date.

A DI holder may obtain a Certificate by submitting to the ITA a completed ITA Form A/114 (titled “Claim for Reduced Rate of Withholding Tax/Exemption from Withholding Tax in Israel for Non-Residents Form”) and any additional information or documents that may be requested by the ITA.

In order to assist Plus500’s investors who are residents of countries that have a tax treaty with Israel from the requirement to apply to the ITA with respect of obtaining a Certificate in order to benefit from the Reduced Withholding Tax Rate, Plus500 is applying to the ITA to obtain a special tax ruling (the Tax Ruling). According to the Tax Ruling, ESOP Management & Trust Services Ltd. is being appointed to serve as a processing agent for the benefit of the investors (the Agent). Accordingly, Plus500’s investors who are residents of countries that have a tax treaty with Israel may approach the Agent within the required time and provide the Agent with the required documentation and declarations as was set in the Tax Ruling (Documentation and Declarations) in order to be entitled to receive the Reduced Withholding Tax Rate from the dividend according the tax treaty between his/her country of residency and Israel. If such relief is relevant for you, please contact the Agent for additional information. Contact information of the Agent is provided at the bottom of this announcement. We encourage you to contact the Agent if you need any assistance in obtaining a Certificate or have any questions concerning the process.

A DI holder must present all the required Documentation and Declarations or valid Certificate to the Agent no later than 7 July 2017, in order to benefit from the Reduced Withholding Tax Rate. Accordingly, if all the required Documentation and Declarations or a valid Certificate is presented to the Agent before 7 July 2017, it is expected that Plus500, via the Agent, would be able to reimburse the difference between the applied Withholding Tax rate at the time of payment of the Dividend and the Reduced Withholding Tax Rate, if applicable.

If the Documentation and Declarations or the valid Certificate is not provided to the Agent by 7 July 2017, Plus500 would be required to withhold tax from the Dividend according to the rates set above without taking into account the Reduced Withholding Tax Rate.

Shareholders are advised to consult with their own personal tax and financial advisers as to the tax consequences resulting from their personal tax situation.

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