On 28 November 2012, Advocate General (AG) at the Dutch Supre Court, Wattel, gave his opinion in case No. 12/01866 on the refund of Dutch dividend withholding tax to a collective investment vehicle (CIV) resident in Finland. The CIV received dividends from Dutch resident entities. It was an 'open-end' investment fund which was exempt from corporate income tax in Finland. Because of this exemption, it could not credit the Dutch dividend withholding tax. The CIV filed a request for a refund of Dutch dividend withholding tax. However, this refund was denied. The CIV was of the opinion that the denial of the refund was a violation of the free movement of capital of – what is currently – article 63 of the Treaty on the Functioning of the European Union (TFEU) and filed an appeal. The tax payer argued that it was comparable to a Dutch exempt entity which would get a refund or to a Dutch fiscal investment fund (FII) which would get a relief comparable to a refund. After the Court of Appeal of 's-Hertogenbosch agreed with the tax payer, this case raised a lot of attention in the Netherlands, not only of the tax community, but also of national newspapers and – probably because of the attention in the press – Members of Parliament. Losing this case might have a negative impact on the Dutch budget. It seems that since 2004 thousands of appeals have been filed by foreign investment funds and pension funds that claim a refund of Dutch dividend withholding tax. Currently, the case is pending before the Supreme Court. The article discusses the judgment of the Lower Court and the Court of Appeal and the opinion of the AG.
|Number of pages||2|
|Journal||Tax Notes International|
|Publication status||Published - 2013|