Good News for Luxembourg Investment Funds Under New Luxembourg-UK Tax Treaty
On 7 June 2022, Luxembourg and the United Kingdom (UK) signed a new double tax treaty (“DTT”) and a supplementary Protocol that will replace the previous DTT signed in 1967. The new treaty conforms with the latest international tax standards agreed upon by the OECD and includes positive changes that will be beneficial for Luxembourg’s collective investment vehicles (“CIVs”) and pension funds.
Italian Supreme Court Upholds CJEU Precedent on Dividend Withholding Tax for Foreign Funds
The Italian Supreme Court (Corte di Cassazione), hereafter the “Court”, issued six judgements (Nos. 21454, 21475, 21479, 21480, 21481 and 21482) on 6 July 2022 relating to United States (US) open-ended investment funds and another judgement (No. 21598) on 7 July 2022 relating to a German open-ended investment fund. The Court established that withholding taxes levied on dividends paid by Italian issuers to foreign investment funds, as far as comparable Italian investment funds were exempt from or subject to a lower rate of withholding tax, is incompatible with the principle of free movement of...
Finnish Update: CJEU Rules Finnish Tax Exemption for Contractual Investment Funds is Contrary to EU Law
In the case A SCPI v. Finland (C-342/20), a decision on 7 April 2022 by the Court of Justice of the European Union (CJEU) found that Finnish legislation, which exempted contractual investment funds from paying income tax, while comparable corporate foreign investment funds were subject to income tax, is contrary to EU Law.
Italian Tax Court Judgement Regarding Luxembourg SICAV Spells Good News for Global Investors with Italian Investments
The Provincial Tax Court of Pescara issued a judgement on 7 February 2022 (Decision No. 49). The judgement established that a Luxembourg SICAV (Société d’investissement à Capital Variable) in accordance with the Directive 2009/65/EC of the European Parliament (“UCITS Directive”) is eligible for a full refund of Italian withholding taxes levied on dividends. The judgement’s determining factor is that the Luxembourg SICAV is deemed comparable to an Italian investment fund.
Foreign Sourced Income Tax Changes in Malaysia — Now Taxable With Limited Relief Until 2026
Historic Treatment of Foreign Sourced Income From 2004 until 1 January 2022, Foreign Sourced Income (“FSI”) received in Malaysia by Malaysian taxpayers was exempt from income tax under Paragraph 28, Schedule 6 of the Income Tax Act, 1967, apart from a resident company carrying on the business of banking, insurance or sea or air transport.
Opinion: Advocate General of the CJEU Finds Finnish Tax Exemption for Contractual Investment Funds Contrary to EU Law
CJEU Advocate General Issues Opinion on Finnish Tax Exemption Relating to Investment Funds On 6 October 2021, the Advocate General of the Court of Justice of the European Union (CJEU) issued an opinion on case C-342/20 Veronsaajien oikeudenvalvontayksikkö (Exonération des fonds d’investissement contractuels) pertaining to Finland’s tax-exemption regime for contractual investment funds. The Advocate General concluded that this regime contains a restriction on the free movement of capital.
The Solution to Successful WHT Recovery for Individuals
WHT can be as high as 35% when investing internationally, which results in a material impact on investment performance. In some instances, WHT recovery can increase dividend yields by up to 50 basis points.
Seeking True North: How to Manage The Challenges of International Withholding Tax as an Investor
Cross-border taxation is complicated at the best of times. However, harnessing the refund opportunities embodied in taxation legislation can be even more daunting for any investment firm’s finance team.