Aberdeen e-alert - Issue 2014-14

Aberdeen e-alert - Issue 2014-14

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KPMG in Luxembourg

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First withholding tax refund for a Luxembourg FCP in Norway

The Norwegian Tax Authorities have granted for the first time a refund of withholding tax (“WHT”) unduly paid by a Luxembourg FCP (“The Claimant”).

 

Situation

The Claimant was arguing that the Norwegian tax treatment applied to outbound dividend payments made to a non-resident contractual fund, such as a Luxembourg FCP (without legal personality), constitutes a discrimination contradictory to the free movement of capital.

The Claimant, assisted by KPMG, had several arguments backing its request to obtain the repayment of Norwegian withholding tax levied in the past, in particular:

  • The Claimant argued that, as a UCITS fund, a Luxembourg FCP is comparable per se to a Norwegian investment fund and should therefore be subject to the same tax treatment.
  • The lack of legal personality cannot be per se a reason for rejecting tax reclaims filed by contractual funds.

 

KPMG comments

This decision is a positive evolution for contractual funds and unit trusts willing to file WHT reclaims in Norway and we assume that more positive decisions will follow.

We believe that the chances of success of contractual investment funds filing WHT reclaims in Norway should now be considered as being high.

We would therefore strongly advise Luxembourg FCPs to claim back unduly levied WHT, in order to obtain reimbursements or to safeguard their rights.

Please note that, as from 1 January 2011 withholding tax claims must be filed within one year after the end of the assessment year. The one year time-limitation period is calculated from the point in time when the decision to distribute the dividends was made by the Norwegian company and WHT levied. Despite the new legislation, the Central Office for Foreign Tax Affairs (COFTA) continues the current practice with a three year time-limitation period to file a claim, starting on 1 January following the dividend distribution.

 

For further information, please do not hesitate to contact us.

 

 

 

 

 

 

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

 

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