The case concerns Fidelity Funds and NN (L) SICAV, two investment funds whose registered offices are in the UK and Luxembourg, respectively.
Unlike Danish investment funds that have invested in Denmark, both UCITS funds were liable to withholding tax (WHT) levied on dividends from Danish companies between 2000 and 2009.
The funds thus argued that this different treatment was contrary to the free movement of capital, and requested a refund of the tax levied.
The Danish court responsible for looking into this case referred it to the Court of Justice of the EU (CJEU) for a preliminary ruling.
On 20 December 2017, Advocate General Mengozzi issued his conclusions on the case (please refer to our fund taxation alert 2018-01 for further information).
The decision from the CJEU is now scheduled to be issued on 21 June 2018.
KPMG Luxembourg comments
This decision is of high importance for foreign investment funds that have invested in Danish shares and paid withholding tax on dividends.
In case the CJEU considers that the Danish tax regime was contradictory to the EU Law, the Danish State would have to refund withholding tax reclaimed in the past by foreign investment funds that are comparable to Danish funds.
In addition, foreign investment funds that are comparable to Danish funds would have the opportunity to file reclaims and ask for a refund of Danish withholding tax levied during the time-limitation period (three years as of the day when the dividend payment was made).
KPMG will make an announcement once the decision is issued by the CJEU.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.