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Illegal withholding taxes to be reimbursed by Govt

Further to a ruling last June when the European Court of Justice found against the Finnish Government in a case involving Aberdeen Property Fininvest Alpha Oy, the Norwegian government have conceded to repay a Luxembourg investment trust tens of millions of Euro’s that it had unlawfully deducted from their dividends. PricewaterhouseCoopers have advised that the case signals a flood of tax refunds due to investment firms from European governments, especially France, Germany, Italy, Spain and Belgium. These governments have for years been taxing dividends paid to non-resident investment funds while exempting domestic investment funds, an illegal practice under European competition law following the ECJ ruling declaring the practice unlawful. Many European countries, including the UK, did not levy these illegal withholding taxes but investors anywhere in Europe could benefit from the refunds. Moreover, all European countries will have to ensure their withholding tax on dividends regimes comply with the ECJ ruling.

Published: 31/03/2010 11:14:55
News Category: Tax News

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