News › Weekly Alert Article

Case For Refund of Dividend Withholding Tax


On 10 May 2012 the European Court of Justice announced a significant judgment (Santander) concerning withholding tax that the State of France had levied for French source dividends paid to non-resident mutual investment funds for their portfolio investments. French legislation has fully exempted comparable French investment funds from a similar kind of tax. Taxand Finland discusses the case and how the judgment may have implications for other multinationals within the EU.

The Santander case concerned a combination of ten cases (C-338/11 - C347/11) which all dealt with the conflict between EU law and French legislation concerning the free movement of capital. The plaintiffs in these cases were different UCITS funds from Spain, Germany and Belgium and investments funds under US regulation.

Taxand Finland provides a more in-depth look at the recent case

Taxand's Take

The judgment gives an opportunity for Finnish and foreign mutual investment funds to claim a refund for the withholding tax that they have paid for dividends received from EU member state provided that comparable funds in that reside in that state are exempted from similar kind of tax. This applies also to non-resident funds that have paid withholding tax to Finland. As a consequence of the judgment both Finnish and foreign mutual investment funds should seriously consider their possibilities to claim for a refund for withholding taxes that they have paid for their dividends within the EU.

Your Taxand contact for further queries is:
Janne Juusela
T. +358 96153 3431

Taxand's Take Author