Last exiting opportunities to reclaim WHT in Germany and in Denmark

1. While at the moment foreign funds are subject to WHT in Germany, from 2018 onwards domestic (i.e. German) and foreign investment funds will both be taxed on German dividends. Notwithstanding the current lack of interpretation for what relates the “Investmentsteuerreform”, the broad assumption is that when the legal entity, which is the claimant towards tax administration, is identical to the domestic investment entity, the WHT refund suffered on dividend distribution by the foreign fund can be filed up until 4 years back.

  To simplify, we are going to distinguish between three different time periods: (i) 2014 and 2015, (ii) 2016 and 2017 and (iii) 2018 and onwards. Only for the third-time frame (i.e. 2018 and onwards the new German investment tax reform) will limit the refund process of withholding tax levied on German dividends. The claim of refunding withholding tax on dividends from 2014 and 2015 (time period i) should not be touched by the new legislation. Those claims should still only be limited to their respective period of limitation, based on the assumption that a 4-year period of limitation may apply to withholding tax reclaims according to ECJ jurisdiction, therefore we should still be apple to file 2014’s reclaims until 31.12.2018 and 2015’s reclaims until 31.12.2019.    

2. In addition to the above, we can add that the Danish domestic view is to tax at a general 27% rate dividends flowing to another jurisdiction. This rate can be mitigated through a refund when double tax treaty is in place. National authorities have amended the legislation related to WHT refund with the intention to eliminate fraud in the refunding process. In particular, the tax administration will acknowledge shareholders position before dividend distribution. Consequently, a tax rate based on shareholder’s specific characteristics will be applied.

  Turn EU Law into value, protect your rights and get more bps! Call us on +353 (1) 907 9894 for a complete analysis of your recovery opportunities.   Stanislas Conte, CEO of Globe Refund.