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Update: Dutch dividend withholding tax refunds
In the Netherlands, foreign investment funds have filed over 24,000 refund requests for Dutch dividend tax based on the EU free movement of capital. Taxand Netherlands discusses a relevant case.
On 19 March 2015, the Dutch Advocate General (AG) concluded in the case in which a Luxembourg fund for collective investment (SICAV) requested for a refund of Dutch dividend tax withheld at the expense of the SICAV.
The key facts in this case are that the SICAV is part of an umbrella fund and has issued accumulation shares on which no dividends are distributed. In addition the SICAV does not have a permanent establishment in the Netherlands and is not obligated to withhold Dutch dividend tax on re-distributions to its shareholders.
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In its conclusion, the AG argued that the SICAV lacked comparability with its Dutch counterpart and should thus be denied the refund request. The AG’s key arguments were that the SICAV was not subject to a withholding obligation and that the SICAV did not meet the re-distribution requirement that Dutch FBIs have to comply with, due to the fact that the SICAV had issued accumulation shares.