global_fs_tax_newsflash_oct_2011_a_development_in_free_movement_of_capital.pdf
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Can non-EU p bene fit from th capital rules in For some t resi dent s c rinciple in only sectio the treaty. be acknowl member sta European Unio specifically the E of capita l (Art icl functioning of th formerly article an avenue for in withholding tax between the wit residents and non Such discri minat inv est or is ent itl dividend withhol non-resident inv subj ec t to full Discrimination residents are su are not. In an eff ‘EU-compliant’, hav e alr eady ma accessible to resi member states in The Netherlands sta te propos ing withholding tax r outside the EU a ot he r EU mem Netherlands in th n impo develop Global FS Tax rtfolio investors e free movement o the EU? ime there has been a debate on an benefit from the free mov Article 63 of the EU Treaty. Th where non-EU residents have sp ased on recent developments, the dgement of this right in the Neth tes are expected to follow suit. (“E U”) law and mo re principle of free movement e 63 of th e Tr eat y on th e European Union (“TFEU”) , 6 EC), specifically provides vestors to reclaim dividend f there is a dis cri mination hol ding tax treatment for -residents. on ari ses where a resi dent ed to a (part ial) re fund of ing tax, while a comparable stor is not and therefore is div ide nd wit hholdi ng tax. also arises when non- ject to tax where residents ort to make their legislation everal EU membe r st ate s de the ir rec lai m proced ure ents from both EU and EEA recent years. is now the first EU member to ex te nd th e di vi de nd fund procedure to investors nd EEA. It is expected that er st at es wi ll foll ow the e coming years. Under the propose the scope of the re div ide nd wit hhol extended to qu countr ies outsid e called third co u (bil ater al or mu exchange of infor With this extensi first EU member s to acknowledge th mov ement of cap portfolio investors and EEA. For the moment, the refund scheme inve st me nts by e charit ies and sove on recent EU c investors such as i companies and ba a refund of Dutch d The Dutch gover n which third count qualify for tax refu concluded many exchang e of inf or li ke ly that this tant ent… Newsflash whet her non-EU ment of ca pi tal is is virtually the cific rights under e now appears to rlands. Other EU d Dutch 2012 Tax Package fund scheme of the Dutch ing tax rules will be al if yi ng inve st ors fr om he EU and the EEA (so- ntries), with which an lt il ateral) agreement on ation has been concluded. n, The Net her land s, (the tate to do so), now appear t the EU principle of free tal should also app ly to n countries outside the EU he propose d extens ion of will only apply to portfolio xempt ed pension funds, eig n weal th funds. Base d se la w, ot he r port foli o vestment funds, insurance ks may also be entitled to ividend withholding tax. ent have yet to determine ries will be cons ide red to d. As The Netherland s has double tax trea ti es and mat ion ag reements, it is li st will be si gnif ic ant.
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Transcript of global_fs_tax_newsflash_oct_2011_a_development_in_free_movement_of_capital.pdf
7/27/2019 global_fs_tax_newsflash_oct_2011_a_development_in_free_movement_of_capital.pdf
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Can non-EU pbenefit from th
capital rules in
For some t residents c
rinciple inonly sectiothe treaty.be acknowl member sta
European Unio
specifically the E
of capital (Articlfunctioning of th
formerly article
an avenue for in
withholding tax
between the wit
residents and non
Such discriminat
investor is entitl
dividend withhol
non-resident inv
subject to full
Discriminationresidents are su
are not. In an eff
‘EU-compliant’,
have already ma
accessible to resi
member states in
The Netherlands
state proposing
withholding tax r
outside the EU a
other EU mem
Netherlands in th
n impodevelop
Global FS Tax
rtfolio investorse free movement o
the EU?
ime there has been a debate onan benefit from the free mov Article 63 of the EU Treaty. Thwhere non-EU residents have spased on recent developments, thedgement of this right in the Neth
tes are expected to follow suit.
(“EU”) law and more
principle of free movement
e 63 of the Treaty on theEuropean Union (“TFEU”),
6 EC), specifically provides
vestors to reclaim dividend
f there is a discrimination
holding tax treatment for
-residents.
on arises where a resident
ed to a (partial) refund of
ing tax, while a comparable
stor is not and therefore is
dividend withholding tax.
also arises when non- ject to tax where residents
ort to make their legislation
everal EU member states
de their reclaim procedure
ents from both EU and EEA
recent years.
is now the first EU member
to extend the dividend
fund procedure to investors
nd EEA. It is expected that
er states will follow the
e coming years.
Under the propose
the scope of the re
dividend withholextended to qu
countries outside
called third cou
(bilateral or mu
exchange of infor
With this extensi
first EU member s
to acknowledge th
movement of cap
portfolio investors
and EEA.
For the moment,the refund scheme
investments by e
charities and sove
on recent EU c
investors such as i
companies and ba
a refund of Dutch d
The Dutch govern
which third count
qualify for tax refu
concluded many
exchange of infor
likely that this
tant ent…
Newsflash
whether non-EU ment of capital
is is virtually thecific rights undere now appears torlands. Other EU
d Dutch 2012 Tax Package
fund scheme of the Dutch
ing tax rules will bealifying investors from
he EU and the EEA (so-
ntries), with which an
ltilateral) agreement on
ation has been concluded.
n, The Netherlands, (the
tate to do so), now appear
t the EU principle of free
tal should also apply to
n countries outside the EU
he proposed extension of will only apply to portfolio
xempted pension funds,
eign wealth funds. Based
se law, other portfolio
vestment funds, insurance
ks may also be entitled to
ividend withholding tax.
ent have yet to determine
ries will be considered to
d. As The Netherlands has
double tax treaties and
mation agreements, it is
list will be significant.
7/27/2019 global_fs_tax_newsflash_oct_2011_a_development_in_free_movement_of_capital.pdf
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Can non-EU portfolio investors benefit
rom the free movement of capital rules
in the EU?
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in thispublication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in thispublication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequencesof you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
© 2011 PricewaterhouseCoopers LLP. All rights reserved. 'PricewaterhouseCoopers' refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) or, as thecontext requires, other member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. ML1-2011-10-17-1031-RP
What should investors do? Investors in third countries that have received portfolio dividends on which dividend withholding tax was withheld
and who cannot credit this dividend withholding tax in their country of residence should review their position and
explore the avenues available to them. In order to safeguard the right to a (potential) refund of dividend withholding
tax, it is imperative that refund claims are filed within the applicable statute of limitation.
The statute of limitations for filing dividend withholding tax claims in The Netherlands is still debated. In principle, the
statutory limitation is 3 years as from the end of the financial year in which the dividend was received. However, based
on the decree of the State Secretary of Finance, under certain circumstances, the statute of limitation may be extended
to five years. To ensure that the rights to a refund are safeguarded, investors may wish to file refund claims within this
3 year timeframe, if possible.
Clients that have portfolio investments in other EU member states should contact PwC to see what the applicable
statute of limitation is. In order to include as many years as possible, it is advisable to take action before 31 December
2011.
PwC ContactsIf you would like to discuss the content of this Breaking News in more
detail please contact:
Name Email Telephone
David Newton - Global FS &
INS Tax Leader
[email protected] +44 (0)20 7804 2039
William Taggart - Global AM
Tax Leader
[email protected] +1 646 471 2780
Richard Stuart Collier -
Global BCM Tax Leader
[email protected] +44 (0) 20 721 23395
Florence Yip [email protected] +852 2289 1833
Martin Vink [email protected] + 31 88 792 6369
Bob v an de r Made bo b.van.der.made @nl.pwc.co + 31 88 7 92 3696
Sjoerd Kuipers sjoerd. kuiper s@nl .pw c. com + 31 88 792 6690
Jan-Pieter van den Berg [email protected] + 31 88 792 6814
Fat ima Bekkal i fatima. bekkal i@nl .pw c. com + 31 88 792 6884
Mano n v an Aalst vincent.osulliv an@ uk.pwc.co + 31 88 7 92 6706
Simon F oekens simon. foekens@nl. pwc.c om +3 1 88 792 7189
Tania Lee [email protected] 020 780 4816
Kareline Daguer kareline .d [email protected] m 0 20 780 45390
