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ZIM Updates Shareholders on Withholding Tax Procedures for December 2024 Dividends

ZIM Integrated Shipping Services Ltd. (NYSE: ZIM), a global leader in container logistics, has recently provided an update regarding the withholding tax procedures associated with its forthcoming cash dividends, slated for distribution on December 9, 2024. This announcement aims to clarify the tax implications for shareholders as stipulated in a ruling obtained from the Israeli Tax Authority (ITA).

Overview of Dividend Distributions

On November 20, 2024, ZIM disclosed plans to distribute a cash dividend of $2.81 per ordinary share, totaling approximately $340 million, along with a special dividend of $0.84 per ordinary share, amounting to about $100 million. Shareholders recorded as of December 2, 2024, will benefit from these distributions.

Understanding Withholding Tax

According to Israeli tax law, dividends distributed by companies are subject to a withholding tax. Currently, the standard withholding tax rate is set at 30% for substantial shareholders—those holding 10% or more of the company's shares—and 25% for all other shareholders. However, due to the recent ruling, certain shareholders could potentially qualify for a reduced withholding tax rate under specific conditions.

Shareholders are encouraged to seek guidance from their tax advisors regarding their particular tax liabilities and the provisions of the recent ruling. ZIM emphasizes that any involved parties must rely on their professional advisors for a clear understanding of implications under different jurisdictions.

Key Terms of the Ruling

To benefit from a reduced withholding tax rate, shareholders need to meet several requirements as outlined in the ruling. Here are the main points:
1. Tax Rate on Payment Date: On the payment date, ZIM will withhold 25% of the dividend amount. This tax will be remitted to the designated agent, IBI Trust Management, which will manage tax proceeds according to the ruling's terms.
2. Shareholder Residency and Benefits: Shareholders residing in countries with active tax treaties with Israel may apply for a reduced tax withholding rate. Additionally, foreign shareholders from countries without such treaties are also invited to submit applications for the same.
3. Application Period: All requests for reduced withholding rates must be submitted to the agent between the payment date and January 7, 2025. It is vital that all requisite documentation accompanies these requests.
4. Documentation Requirements: To substantiate claims for a reduced tax rate, shareholders must provide relevant documentation, including but not limited to proof of residency, identification, and bank details for dividend transfers.
5. Exclusions & Limits: Shareholders holding more than 5% of ZIM's issued share capital or whose dividends exceed $500,000 total may not be eligible for tax refunds without specific ITA approval.

Contacting the Agent

ZIM has appointed IBI Trust Management as the processing agent to facilitate the distribution of dividends and manage inquiries. Shareholders seeking clarification on the application process for reduced withholding rates can contact the agent directly. However, ZIM advises shareholders to consult their tax professionals for any tax-related advice, as the agent will not provide such guidance.

Conclusion

As a prominent player in the global shipping sector, ZIM is committed to transparency in its dividend distribution processes. By providing clear updates on withholding tax procedures, ZIM aims to assist its shareholders in understanding their financial implications and preparing the necessary documentation in a timely manner.

For further information on the ruling, dividend distributions, and tax procedures, shareholders can visit ZIM's official website or contact IBI Trust Management directly.

About ZIM

Founded in 1945, ZIM Integrated Shipping Services Ltd. is a leading international container shipping company. With operations spanning over 90 countries, ZIM serves approximately 33,000 customers and manages logistics across 300 ports worldwide, offering innovative services supported by digital strategies and a commitment to sustainability.