Recital (20)

Certified financial intermediaries should be required to verify the applicable withholding tax rate based on the investor’s specific circumstances and to indicate whether they are aware of any financial arrangement involving the underlying securities that has not been settled, expired or otherwise terminated before the ex-dividend date. In that context, the obligation should be understood in the sense that the closest certified financial intermediary to the investor, its client, should take reasonable measures to perform such checks in good faith. For example, certified financial intermediaries should check whether the information in the eTRC or its equivalent, or the information in the investor’s declaration, does not contradict the information collected by those certified financial intermediaries on their clients in their normal course of business. Such information includes the investor’s account information and other information that they might have collected as a result of complying with applicable know-your-customer rules. Therefore, certified financial intermediaries should not be required to perform further checks or to request and collect further information from their customer. Additionally, the investor should be required to inform the financial intermediary of any changes in its relevant circumstances. Member States should be permitted to allow due diligence requirements to be carried out on an annual basis unless the certified financial intermediary knows or ought to know that there has been a change of circumstances or that the information is incorrect or unreliable.