• 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)


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.

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