Italy’s Supreme Court has strengthened the case for foreign investors seeking an Italian dividend withholding tax refund. In Decision no. 4761/2026, the Court confirmed that charging a higher WHT on outbound dividends than the effective tax burden applied to comparable domestic recipients can breach Article 63 TFEU.
This is important for investment funds and corporate investors that suffered Italian withholding tax on dividends and may now have a stronger basis for a tax reclaim.
The Court took a strict approach: the Italian tax treatment must be assessed in Italy, on a tax-by-tax and item-by-item basis, rather than by looking at unrelated tax benefits available in the investor’s home country. It also rejected arguments that foreign tax credits, exemptions, or other overseas advantages can “compensate” for discriminatory Italian withholding tax.
That makes the ruling especially helpful for foreign funds that were taxed at a higher rate than comparable domestic Italian investors.
The decision also clarifies the evidence needed for a WHT reclaim. A claimant only needs to show that it is resident in an EU Member State or a non-EU State and that it is subject to corporate income tax there.
There is no need to prove that the specific dividend was actually taxed in the country of residence. That reduces the documentary burden and may speed up the preparation of refund cases.
For foreign investment funds, the ruling supports dividend WHT refund claims where Italian tax was higher than the burden borne by domestic comparable entities. It also gives additional momentum to pending court cases relying on the same free-movement principle.
If your fund or company received Italian dividends and paid WHT at a rate that may have been discriminatory, this ruling may open the door to a refund claim. Globe Refund can help assess the claim, organize the tax reclaim file, and support court proceedings where needed.
Our work focuses on providing outsourced withholding tax recovery services to safeguard your investments from over-taxation and save your time from burdensome processes.
