UK funds in line for €5bn French tax rebate: PwC
European Court of Justice ruling means foreign investors in French companies cannot be levied 15-25 per cent on dividends.
Equity fund managers could be in line for a massive tax rebate after a European Court of Justice (ECJ) ruling on a French withholding tax.
France has previously charged foreign investors in French companies 15 per cent - and in some cases 25 per cent - on any dividend payments, while French investors do not pay anything.
The ECJ has today ruled that the tax is discriminatory and should not be levied at all, which accountancy and audit firm PricewaterhouseCoopers (PwC) has claimed could result in tax refunds of up to €5bn (£4bn).
PwC said the ruling could set a precedent for other countries which levy similar taxes, including Germany, the Netherlands and Belgium.
Teresa Owusu-Adjei, tax partner at PwC, said: “UK pension and investment funds will no longer have to pay more tax on their dividends from investments in French companies than their French equivalents and in a difficult economic climate, funds will welcome any measure which allows them to maximise returns.
“Investment funds that may have paid this withholding tax any time over the past five years should investigate now as to whether they are able to claim rebates. Europe-wide these claims could amount to as much as €20bn so it is in funds’ interests to act now.”