Dutch Supreme Court refers questions on withholding tax refunds for foreign investment funds to CJEU

Tax Alert


The Dutch Supreme Court has referred preliminary questions on Dutch dividend withholding tax refunds for foreign investment funds to the Court of Justice of the European Union (CJEU). The Dutch Supreme Court wishes to clarify whether the refusal to refund Dutch dividend withholding tax to foreign investment funds is discriminatory under EU law, in light of recent developments in other EU countries. This move signals a potential opening in the Netherlands for non-resident investment funds to claim refunds of dividend withholding tax.


On July 10, 2015, the Dutch Supreme Court ruled that a Luxembourg investment fund is not objectively comparable to a Dutch fiscal investment fund, which is entitled to a refund for Dutch dividend withholding tax. Therefore, the difference in tax treatment does not contradict the EU principle on free movement of capital.

Soon after the judgment of the Dutch Supreme Court in July 2015, the CJEU ruled in joined cases Miljoen, X, and Société Générale SA on a very similar issue. The CJEU concluded that it was contrary to EU law to impose a higher dividend withholding tax on non-residents than the dividend withholding tax imposed on resident shareholders.

Key Developments

Dutch District Court

On August 1, 2016, following developments in recent CJEU cases such as Miljoen, a Dutch District Court asked the Dutch Supreme Court if it saw any reasons to reconsider the July 10, 2015 decision, by referring preliminary questions to the Dutch Supreme Court in two cases involving requests for refunds of Dutch dividend withholding tax by non-resident investment funds.

In response to the Miljoen case, it was argued in the tax literature that the CJEU applied a different comparative criterion than the Dutch Supreme Court did. With the criticism in tax literature and the many similar pending cases in mind, the Dutch district court felt obliged to refer preliminary questions to the Dutch Supreme Court. The district court wanted to know whether the Dutch Supreme Court would reconsider its earlier ruling in light of the recent CJEU decision and, if so, which test should be applied for the comparability analysis.

Dutch Supreme Court

The Dutch Supreme Court believes, initially, that the Miljoen case does not change its former conclusion that a foreign investment fund is not comparable to a Dutch fiscal investment fund. The Supreme Court believes that the recent CJEU judgements in Pensioenfonds Metaal and Techniek confirms this statement.

However, a Danish court has referred questions to the CJEU for a preliminary ruling in a similar case (Fidelity Funds). The Dutch Supreme Court believes that it is no longer beyond reasonable doubt that its decision in 2015 is correct. The Supreme Court therefore decided to refer preliminary questions to the CJEU regarding the possibility that refusing the refunds of withholding tax for foreign investment funds discriminates against the European Union right to free movement of capital. In addition, the Dutch Supreme Court is asking the CJEU to clarify the circumstances under which a foreign investment fund is comparable to a resident investment fund.


Despite the earlier judgment of the Dutch Supreme Court, there are still many legal proceedings before the court for similar cases. About 1,500 similar cases are pending before the Dutch District Court at the date of referral, and it is reasonable to assume that there are many more potential cases.

The recent referral by the Dutch Supreme Court to CJEU signals a potential opening for refund claims on dividend withholding tax from non-resident investment funds in the Netherlands, in line with developments in other EU countries.