The Danish Tax Authorities (SKAT) recently started processing reclaims for refund of dividend withholding taxes made under European Union (EU) discriminatory treatment principles (Fokus Bank reclaims). Fokus Bank reclaims into Denmark were recently "on hold" with the Danish Tax Authorities while they waited for decisions on cases currently before the Danish High Courts (Østre Landsret). A decision by the High Courts to request a preliminary ruling from the Court of Justice of the European Union (CJEU) was made on June 8, on the question of discriminatory treatment. The court cases referred to the CJEU concern reclaims filed by investment funds. Over the years, a large number of refund claims of Danish dividend withholding tax have been filed with the Danish Tax Authorities by nonresident investment funds and pension institutes claiming that the Danish dividend withholding tax rules are in breach of EU law. However, the Danish Tax Authorities have now concluded that there is in fact no legal basis for not processing such reclaims and have therefore started the administrative processing of Fokus Bank reclaims.

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

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Full text of Tax Alert 2016-1832