EU Commission asks France to change its withholding tax rules on dividends to insurance companies in other EEA Member States
The Commission has today sent a letter of formal notice to France urging it to change its withholding tax rules on dividends paid to “Unit Linked insurance” companies established in other European Economic Area (EEA) Member States. Unit Linked insurance is a live insurance scheme where the premiums paid by the policy-holder are used to purchase units in investment funds selected by that person, and where the dividends paid out by the funds are passed on by the insurer to the policy-holder. Unit Linked insurance companies established in EEA Member States are required to pay a final withholding tax on French dividends received. However, Unit Linked insurance companies established in France either pay no withholding tax on these dividends, or can credit the withholding tax paid against French corporation tax, which amounts to zero. This is because the dividends received constitute deductible provisions or technical reserves. The Commission deems that these rules infringe on the free movement of capital (Article 63(1) of the TFEU and Article 40 of the EEA Agreement). France has two months to reply to the arguments raised by the Commission. Otherwise, the Commission may decide to send a reasoned opinion.
EU Commission requests Sweden to amend its rules on taxation of dividends to non-resident public pension institutions
The Commission has today sent a letter of formal notice to Sweden drawing its attention to the potential incompatibility of its legislation with EU law on taxation of dividends paid to public pension institutions. Whereas Swedish public pension funds are, as government agencies, entirely exempt from tax liability, dividends paid to equivalent non-resident public pension institutions are subject to a withholding tax, commonly at a reduced rate of 15% as provided for in the tax treaties concluded between Sweden and other EU/EEA countries. The Commission considers that such a fiscal scheme under which dividends paid to foreign public pension institutions are subject to less favorable treatment than similar distributions in purely domestic situations may infringe the free movement of capital (Article 63(1) of the TFEU and Article 40 of the EEA Agreement). Sweden has two months to reply to the arguments raised by the Commission after which the Commission may decide to send a reasoned opinion.
Source: https://ec.europa.eu/commission/presscorner/detail/en/INF_21_441
Takeover
These letters of formal notice are a positive news for insurance companies and pension funds who file protective claims on a regular basis. The EU Commission confirms an infringement on the free movement of capital within the EEA. We think that France and Sweden will respond positively to the EU Commission in order to avoid costly ECJ case law. Always bear in mind that ECJ claims is a success story for investors. We recommend you to protect your rights to refund by filing protective claims.
Globe Refund regularly files protective claims for insurance companies and pension funds, please contact us for a free assessment of the reclaimable amounts at contact@globerefund.com