Positive decision from the Spanish Administrative Court regarding a Luxembourg UCITS
The Regional Administrative Court of Madrid (“Tribunal Económico-Administrativo Regional de Madrid”) recently issued a positive decision regarding withholding tax (“WHT”) reclaims filed on behalf of a Luxembourg resident FCP, qualifying as UCITS.
In the resolutions, the Court accepted the formal arguments contained in the appeals and acknowledged that the procedure followed by the Spanish Tax Authorities to reject WHT reclaims was illegal. Indeed the Court considered that the tax authorities had failed to properly review the documentation provided to them in order to support the WHT reclaims.
Though this decision is positive, it should be noted that the Court did not perform an analysis with regard to the existence of a discrimination being contradictory to the free movement of capital.
Once the resolutions have been issued, the files will be transferred back to the tax authorities that may then file an appeal against the decision of rejection. However, based on our experience with similar cases, this should not be the case. In such circumstances, it is likely that the Spanish Tax Authorities will issue a decision of reimbursement once the file has been reviewed.
Based on this positive decision, which is confirming recent similar jurisprudence of Spanish Courts, it is recommendable for Luxembourg funds qualifying as UCITS to file WHT reclaims in Spain. Although the Spanish Tax Authorities still generally reject the claims, this current case law constitutes a positive trend in Spain and shows that it is worthwhile appealing negative decisions before national courts.
Luxembourg FCP entitled to refund in Finland
On 20 March 2013, the Finnish Central Tax Board issued a very positive ruling according to which withholding tax should not be levied on dividend distributions from a Finnish company to a Luxembourg Fonds Commun de Placement (FCP). For more details please refer to our E-alert 2013-05.
The ruling that was not appealed by the Finnish Tax Authorities has now become final.
On the grounds of this advance ruling, it is now recommendable for FCPs qualifying as UCITS to file withholding tax reclaims in Finland. A withholding tax reclaim filed before the end of the year 2013 may cover years 2008 onwards.
In addition, in all cases where a Luxembourg resident FCP qualifying as a UCITS has already received a negative decision, we recommend the earlier decision to be appealed quickly.
For more 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.