Global

Details

  • Service: Tax, International Tax
  • Type: Regulatory update
  • Date: 4/10/2014

Poland - Exemption for dividends paid to U.S. investment fund 

April 10:  The Court of Justice for the European Union (CJEU) today issued a judgment concluding that Poland (an EU Member State) may not deny a tax exemption for dividends paid by Polish companies to an investment fund established in a non-EU Member State (here, the United States) if there is an agreement for mutual administrative assistance in place between the two countries. Emerging Markets Series of DFA Investment Trust Co. v. Dyrektor Izby Skarbowej w Bydogszczy, C-190/12 (10 April 2014)

Summary

In Poland, the corporate tax law exempts investment funds from tax. To qualify for the exemption, a fund must have its registered office in Poland.


As explained in today’s CJEU release [PDF 116 KB], a U.S. investment fund (part of its business consisting of investments in Polish companies) requested in 2010 from the Polish tax authority a refund of a flat-rate corporation tax for the years 2005 and 2006. The tax had been levied, at a rate of 15%, on dividends paid to the fund by the companies established in Poland.


On the rejection of that request, the fund brought an action before the Wojewódzki Sad Administracyjny w Bydgoszczy (the administrative court of Bydgoszcz, Poland) and that court referred the case to the CJEU as to whether EU law precludes a tax law measure under which dividends paid by companies established in an EU Member State to an investment fund established in a non-Member State cannot qualify for the tax exemption.


In its judgment today, the CJEU concluded that an EU Member State cannot exclude from the tax exemption those dividends paid by nationally established companies to a non-Member State investment fund when there is in place an agreement for mutual administrative assistance.


The CJEU moreover held that it is for the Polish court to examine and determine whether the agreement for the exchange of information enables the tax authorities to verify the information provided by the investment fund.


Read an April 2014 report [PDF 49 KB] prepared by KPMG's EU Tax Centre.




©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in 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.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

 

Share this

Share this

Subscribe

Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)


Already a Subscriber? Login


Not a member? Subscribe now