Dutch withholding tax regime could violate EU regulations - A Blog from Freemont Group
Freemont Group
04 April, 2012

The defense asserted that their case was comparable to native Dutch tax exempt legal entities that are entitled to a refund of withholding tax. Being a foreign entity, the Finnish fund could not obtain such refund. This discrimination was seen as a violation on the free movement of capital.
Initially losing in the lower court, the fund was proven right in the court of appeal, although the case is likely to go further up. The Dutch ministry of finance will pursue an appeal with the Supreme Court, and if that proves unsatisfying, probably ask for a ruling from the European Court of Justice.
Should the Finnish investment fund prevail, it could see thousands of similar funds from Luxembourg, Liechtenstein, Austria and other EU member states claim refunds to a total value of approximately 1 billion Euro. The stakes are high in a case that we will follow with great interest.
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