Dutch Supreme Court opens the door to refund of Dutch dividend withholding tax to foreign investment funds. Today, the Dutch Supreme Court ruled that foreign investment funds that meet certain shareholder conditions are eligible for refund of Dutch dividend withholding tax. These are conditions that Dutch investments must also meet for a refund of dividend withholding tax. In doing so, the Supreme Court repeals an earlier decision from 2015. In that decision it had decided that foreign investment funds are never objectively comparable to Dutch investment funds because they are not liable to withhold Dutch dividend withholding tax And Dutch investment funds are. And because their situations are not comparable there would no discrimination prohibited by the free movement of capital. And consequently no entitlement to refund. Today’s Supreme Court decision is in line with the ECJ’s decision in the 2018 Fidelity Funds case. This is a case concerning a very comparable Danish situation (click here to read our analysis of the Fidelity Funds decision). The refund to foreign investment funds is reduced by the amount of Dutch dividend withholding tax that would have been owed when both the foreign investment fund and its participants had been tax resident in the Netherlands. In other words, a refund is granted only with respect to those participants which, in a fully Dutch internal situation, would not have owed any Dutch dividend withholding tax either. Contact us if you would like to know more about this decision.