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Fund Taxation Alert 2018-14

Fund Taxation Alert 2018-14



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Polish withholding tax refund for an Australian investment fund

In November 2018, the Polish tax authorities granted a withholding tax (WHT) refund to an Australian investment fund that had filed WHT reclaims in Poland.

Even though this is in line with EU law and jurisprudence, it is the first time in practice that an Australian investment fund has received a WHT refund following EU law-based WHT reclaims.


As confirmed by the Court of Justice of the European Union in the Aberdeen (C-303/07) and Santander (C-338/11 – 348/11) cases, foreign investment funds are entitled to receive refunds of WHT paid in contradiction with the EU fundamental freedoms.

The Emerging Markets Series (C-190/12) case further confirmed that non-EU investment funds having unduly paid WHT should also be able to obtain WHT refunds.

On this basis, several EU and non-EU investment funds filed WHT refunds in Poland, as the Polish WHT regime treats domestic and non-resident investment funds differently.

Following this development, several EU investment funds obtained WHT refunds in the past years.

However, no Australian investment fund has obtained WHT refunds until now.

The decision

In Poland, WHT reclaims are filed locally, at the level of tax offices, depending on the entities that paid the dividends on which WHT was levied.

In November 2018, a local tax office, the First Śląski Tax Office in Sosnowiec (‘I SUS’), granted a full WHT refund to an Australian investment fund. However, I SUS refused to grant interest for late payment to the fund.

The way forward

This decision is a very good sign for non-EU investors that paid WHT tax in Poland in the past, and we expect other Polish tax offices to adopt the same position in the future.

It is important that WHT reclaims are filed within the Polish time limitation period, which is of five years and begins to run as of 1 January following the dividend distribution.

KPMG Luxembourg can assist EU and non-EU investment funds to file such WHT reclaims.

© 2020 KPMG Luxembourg, Société coopérative, a Luxembourg entity and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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