Netherlands: CJEU judgment, withholding tax on non-resident portfolio shareholders

Netherlands: CJEU judgment, withholding tax

The Court of Justice of the European Union (CJEU) today issued a judgment in combined cases, holding that Dutch withholding tax on non-resident portfolio individual and corporate shareholders would be contrary to EU law if the tax burden on the non-resident is greater than it would be for a resident shareholder. In this respect, the comparison would need to take into account the corporate / individual income tax position of residents, and whether they could claim a credit or obtain a refund of the withholding tax.

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The CJEU explained that in comparing this tax burden, only costs that are directly related to the collection of the dividends would be taken into account. A provision in a tax treaty could neutralize the breach of EU law if it results in a credit of the full amount of the withholding tax.

 

Read a September 2015 report prepared by KPMG’s EU Tax Centre: CJEU decision in the joined cases Miljoen, X, and Société Générale

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