HAIFA, Israel, Aug. 23, 2021 /PRNewswire/ -- ZIM Integrated
Shipping Services Ltd. ("ZIM" or the "Company") (NYSE: ZIM), a
global container liner shipping company, is pleased to announce to
the holders of its ordinary shares (the "Shareholders"), that it
secured a tax ruling (the "Ruling") from the Israeli Tax Authority
("ITA") with respect to the tax withholding procedures relating to
the payment of dividend expected to take place on September 15, 2021, as detailed below. As a
result of the Ruling, certain Shareholders may be eligible to a
reduced Israeli withholding tax rate with respect to their share of
this dividend distribution, in comparison to the generally
applicable withholding tax rate (the "Reduced Withholding Tax
Rate"), under certain terms and conditions as set forth below.
Background
On May 19, 2021, ZIM announced a
dividend payment of $2.00 per share
(approximately $238 million) (the
"Dividend"), which trades ex-dividend on August 24, 2021. Payment of the Dividend is
expected to be made on September 15,
2021 (the "Payment Date"), to the Shareholders on record as
at close of trading on August 25,
2021.
General Withholding Tax Treatment under Israeli Law
As set out in the Company's Annual Report on Form 20-F filed
with the Commission on March 22,
2021, with respect to dividends sourced from regular
earnings, under the Israeli Tax Ordinance and regulations issued
under the Israeli Tax Ordinance (collectively, "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"). Notwithstanding the foregoing, as a result of the Ruling and
subject to its terms and conditions, certain Shareholders, both
Israeli and non-Israeli, may be eligible to a reduced Israeli
withholding tax rate on their share of this dividend distribution,
in comparison to the generally applicable withholding tax rate
described above, (the "Reduced Withholding Tax Rate"), under
certain terms and conditions as set forth below.
Summary of the Main Terms of the Ruling
The following is a summary of some of the key terms of the
Ruling. It is emphasized that the description below does not
purport to exhaust all the terms and conditions included in the
Ruling and is not a complete translation of the Ruling. In order to
enjoy the Reduced Withholding Tax Rate, Shareholders must comply
with all the terms of the Ruling, a copy of which in the Hebrew
language as well as an unofficial non-binding English translation
thereof can be obtained free of charge by email by approaching the
Agent (as defined below) at the contact details provided
below.
- On the Payment Date the Company will withhold 25% of the
Dividend amount and will remit the tax amount to the Agent, to be
handled by the Agent in accordance with the terms and conditions of
the Ruling.
- The remaining 75% of the Dividend amount will be remitted by
the Company to its transfer agent, American Stock Transfer &
Trust Company, LLC ("AST"), which will transfer the said amount to
the Shareholders (including through brokers who hold in brokerage
accounts ZIM shares on behalf of Shareholders).
- A Shareholder who is a resident of a country with which
Israel has a tax treaty
("Treaty State") (based on a declaration to be provided by
such Shareholder) and is the beneficial owner of the Dividend, as
well as a Shareholder who is a foreign (i.e., non-Israeli)
resident of a country with which Israel does NOT have a tax treaty and is the
beneficial owner of the Dividend, may apply to the Agent requesting
a Reduced Tax Withholding Rate. Such application must be received
by the Agent between the Payment Date and October 11, 2021 ("Change of Rate Period").
- A Shareholder who declared that he or she is a resident of a
Treaty State and is the beneficial owner of the Dividend may apply
to the Agent during the Change of Rate Period only (subject to
complying with all the documentation requirements detailed below)
requesting the receipt of the monetary difference between the tax
amount remitted to the Agent (at a rate of 25%) and the amount
represented by the withholding tax rate set forth in the tax treaty
between Israel and such Treaty
State or by the limited withholding tax rate applicable to such
dividend payment under the ITO, to the extent applicable.
- A Shareholder who did not declare that it, he or she is a
resident of a Treaty State and is the beneficial owner of the
Dividend, may apply to the Agent during the Change of Rate Period
only (subject to complying with all the documentation requirements
detailed below) requesting the receipt of the monetary difference
between the tax amount remitted to the Agent (at a rate of 25%) and
the amount represented by the withholding tax rate applicable
to such dividend payment under the ITO or by the limited
withholding tax rate applicable to such dividend payment under the
ITO, to the extent applicable.
- Any Shareholder who claims to be entitled to a Reduced Tax
Withholding Rate in accordance with the foregoing, will be required
to provide the Agent with all relevant documentation as detailed in
the Ruling no later than October 11,
2021 (the end of the Change of Rate Period), including but
not limited to, bank account details to which the dividend payment
should be transferred, number of ZIM shares owned by the
Shareholder in such account, identification document, and
confirmation of residence issued by the taxing authority of the
state of tax residence.
- In addition to the foregoing, the Shareholder will provide a
written declaration in the form annexed to this announcement which
will include declarations as to the following: (i) the
Shareholder's tax residence, (ii) the Shareholder's beneficial
ownership of the dividend, (iii) the investment in ZIM shares has
not been made through a permanent establishment in Israel, (iv) the holding of ZIM shares is made
for the Shareholder's own account and not for the account of
others, and (v) the payment will not be made to a permanent
establishment of the Shareholder outside of the Shareholder's tax
residence.
- A non-Israeli corporate Shareholder (excluding a Shareholder
covered by section 9 below) that requests a Reduced Tax Withholding
Rate, will also need to provide the Agent with its updated
shareholders register as of August 25,
2021, and a statement confirming that more than 75% of its
shareholders, directly or indirectly, are individuals of its state
of residence.
- A publicly traded non-Israeli corporate Shareholder whose
shares are traded on a stock market outside of Israel and is a resident of a Treaty State, or
a direct or indirect subsidiary of such Shareholder, will also
provide the Agent with a declaration that it is a resident of such
Treaty State or another non-Israeli state, as applicable.
- An Israeli corporate Shareholder which is entitled to a Reduced
Tax Withholding Rate (including an exemption from withholding tax
at source), will be able to apply to the Agent no later than
October 11, 2021 (the end of the
Change of Rate Period) and enclose an applicable valid ITA issued
certificate setting forth a Reduced Tax Withholding Rate or an
exemption from withholding tax. In addition, such Shareholder will
enclose its certificate of incorporation and all other documents
required as set forth above, mutatis mutandis as requested
by the Agent.
- The Agent is entitled to request from the Shareholders applying
for a Reduced Tax Withholding Rate additional documents in its
discretion insofar as they are required to establish the tax
residence of the Shareholder or its entitlement to exemption and/or
to a Reduced Tax Withholding Rate.
- Notwithstanding the foregoing, no refund of excess tax
withholding shall be affected by the Agent with respect to any
Shareholder holding more than 5% of the issued share capital of the
Company, or whose entitlement to dividend from the Company pursuant
to the Dividend exceeds $500,000,
other than in accordance with a specific approval issued by the
ITA.
- The transfer of the amounts withheld, excluding the amounts
returned to the Shareholders, as aforementioned, shall be conducted
by the Agent. Subject to receipt by the Agent of your required
documentation, the Agent will return the amounts withheld to the
Shareholders as detailed above to the account at which the
dividend payment was made within 30 days from the date the amounts
withheld are paid to the ITA.
- The Ruling is aimed to address solely the issue of tax
withholding procedures and should not be construed as setting the
actual tax liability of any Shareholder with respect to the
Dividend or otherwise.
Appointment of Israeli Tax Withholding Agent
In order to facilitate the implementation of the procedures set
forth in the Ruling for the benefit of its Shareholders, the
Company appointed ESOP Management & Trust Services Ltd
to serve as a processing agent for the benefit of the Shareholders
in connection with the distribution of the Dividend (the
"Agent"). Contact information of the Agent is provided at the
bottom of this announcement. We encourage you to contact the
Agent if you need any clarifications in filling-in the forms
required under the Ruling to obtain a Reduced Withholding Tax Rate,
or if you have any questions concerning the process.
In order to be eligible to benefit from a Reduced Withholding
Tax Rate, Shareholders must provide the Agent with all
documentation required under the Ruling not later than
October 11, 2021. If a
Shareholder fails to provide the Agent with all the documentation
required by the October 11, 2021, the
Agent will not be able to attend to such Shareholder's application
and will not be able to return any amounts originally remitted on
behalf of such Shareholder nor provide any confirmation of tax
withholding to such a Shareholder, either in connection with the
Ruling or in connection with any other tax filing by such
Shareholder.
Disclaimer: For the avoidance of doubt, the above does
not address the actual tax liability of any Shareholder, but merely
relates to Israeli withholding tax procedures relating to the
distribution of the Dividend, in accordance with the Ruling. The
Ruling solely deals with the withholding tax question and does not
exhaust the full tax liability of any Shareholder. Shareholders are
advised to consult with their own personal tax and financial
advisers as to the tax consequences resulting from their personal
tax situation.
ZIM's Agent Contact Information:
ESOP Management & Trust Services
Ltd.
Tel No: +972-3-7536823
Fax No: +972-3-7602636
Email: esop-helpdesk@esop.co.il
About ZIM
ZIM is a global container liner shipping company with leadership
positions in the markets where it operates. Founded in Israel in 1945, ZIM is one of the oldest
shipping liners, with over 76 years of experience, providing
customers with innovative seaborne transportation and logistics
services with a reputation for industry leading transit times,
schedule reliability and service excellence.
ZIM Contacts
Media:
Avner Shats
ZIM Integrated Shipping Services Ltd.
+972-4-865-2520
shats.avner@zim.com
Investor Relations:
Elana Holzman
ZIM Integrated Shipping Services Ltd.
+972-4-865-2300
holzman.elana@zim.com
Leon Berman
The IGB Group
212-477-8438
lberman@igbir.com
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SOURCE ZIM Integrated Shipping Services Ltd.