The Dutch Lower Court of Breda (the Lower Court) on August 1, requested the Dutch Supreme Court (the Supreme Court) to clarify its current case law in which it rejected Dutch dividend withholding tax reclaim requests filed by foreign investment funds based on an infringement of EU law. The Supreme Court ruled in 2015 that foreign investment funds are not comparable to a Dutch fiscal investment institution (FBI), as they are not withholding agents for Dutch dividend withholding tax upon redistribution. As such, the Supreme Court ruled that EU law does not require the Netherlands to refund Dutch dividend withholding tax incurred by foreign investment funds on their Dutch dividend income. In the current two cases before it, the Lower Court requests the Supreme Court to answer whether it agrees with the arguments to reconsider its 2015 ruling, and how certain specific aspects of the two cases should be ruled on. The preliminary questions seem to cast doubt on the earlier unfavorable ruling of the Dutch Supreme Court.

A Tax Alert prepared by Ernst & Young Netherlands, and attached below, provides additional details.

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Full text of Tax Alert 2016-1498