The Dutch tax authorities recently issued a ruling in relation to the Strathclyde Pension Fund which may lead to rebates of over €100m to UK pension funds. The ruling states that the Dutch tax authorities should not have levied a “withholding tax” on dividend payments to tax exempt bodies (such as UK pension funds) located within the European Union but outside the Netherlands.
The ruling applies only in respect of dividends paid before 1 January 2007 and will be of interest to UK schemes with investments in Dutch-listed companies. The Dutch authorities are paying settlements on a discretionary basis, having not stated formally that the rules prior to that date were actually in breach of EU law and affected UK schemes seeking to make a claim should seek tax advice without delay, so as not to fall foul of any time limits.
This ruling follows the ECJ’s decision in Amurta SGPS v Inspecteur van de Belastingdienst C-379/05, as reported in our December 2007 update, which held that it is discriminatory to impose inconsistent withholding tax rules on company dividends dependent on the Member State in which the distributing company is based.