At the beginning of September, the Swedish Administrative Court of Appeal (“the Court”) granted interest for late payment on withholding tax amounts repaid to foreign investment funds, including SICAVs (“The Claimants”), in four different judgments.
The Claimants were arguing that foreign investment funds have the right not only to reclaim withholding tax (“WHT”) refunds, but also to reclaim interest on the repaid amounts.
Although there are no rules in this respect in the Swedish WHT Act, the Court accepted this argument.
The Court ruled that:
This decision should be a positive evolution for non-resident investment funds willing to file WHT reclaims in Sweden.
These new judgments also raise new possibilities regarding interest on refunded amounts to funds who have already received positive judgments regarding WHT refunds, however not including interest. Indeed, they now have a possibility to reclaim interest within two months after the notification of the decision of reimbursement.
Please note that the Swedish Tax Agency might appeal the judgments before the Supreme Administrative Court, which may have a different position from the one of the Court. The Claimants may also appeal this decision, in order to obtain interest from an earlier date. We believe however that both solutions are unlikely.
For further information, please do not hesitate to contact us.
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