German CIV vs Portugal

In this edition, we go back to 2022 where the CJEU ruled another positive decision for the investment funds industry, especially for funds receiving dividends from Portugal.

Portuguese law outlined a tax regime for Collective Investment Vehicles (CIVs), favoring local entities over foreign ones, raising issues of discrimination and potential refunds for withheld taxes.

The case C-545/19 involved AllianzGI-Fonds AEVN, a German CIV denied tax exemptions for Portuguese-sourced income, leading to a CJEU referral.

The CJEU considered whether the taxation of foreign CIVs aligned with EU law, especially concerning stamp duty and withholding tax (WHT). Advocate General Kokott's opinion suggested potential formal inequality regarding investors but emphasized the relevance of investors' situation in granting exemptions.

In its decision, the CJEU clarified that foreign CIVs face WHT on dividend income while Portuguese CIVs encounter stamp duty, seen as a property tax. Additionally, it highlighted that the taxation at the CIV shareholder level hinges on local regulations' criteria, disregarding the shareholders' taxation in foreign CIVs.

This ruling sheds light on the distinction between taxes imposed on local and foreign CIVs, reinforcing EU law principles against discrimination. It reiterates that Article 63 TFEU prohibits preferential treatment of resident CIVs over non-residents regarding dividend distribution taxation.

Regular Positive Rulings from Appellate Courts for Incorrectly Withheld Taxes on European Stock Dividends are Common. Monitoring these decisions is crucial to ensure optimal taxation for your funds.

These decisions are part of the arguments used by Globe Refund to recover taxes unfairly collected on your dividends. That's why we closely follow and analyze them for you, extracting all the information that can help optimize the taxation of dividends generated by your shares.