A Luxemburg company received dividends from a Finnish non-quoted company (Aberdeen) in which it owned all the shares. Finnish dividend tax was withheld on these distributions. If the Luxemburg company had been a Finnish ‘limited’ or a Finnish investment fund it would have been exempt from Finnish dividend withholding tax.

A-G Mazák, referring to Denkavit Internationaal and Amurta, stated that in circumstances where a Member State imposes a tax on residents and on non-residents in respect of a dividend received from a resident company, the position of non-resident shareholders is objectively comparable to that of resident shareholders. He also concluded that a Luxembourg SICAV is objectively comparable to a Finnish limited liability company or a Finnish investment fund for purposes of the Finnish dividend tax exemption. As such the exemption must be extended.

If the ECJ follows the Opinion of the A-G it is likely that a great deal of dividend tax levied across the EU will have been levied in breach of Community Law. If you believe you may be affected by such a decision it is recommended that you safeguard your rights by filing requests for refunds or exemption from dividend taxation.