Fund Taxation Alert 2022-01

Finish Tax authorities grant refunds to a Luxembourg SICAV

Finish Tax authorities grant refunds to a Luxembourg SICAV

Olivier Schneider

Partner, Financial Services Tax

KPMG in Luxembourg


Positive WHT refund decision by the Administrative Court of Helsinki in favor of a Luxemburg based listed SICAV fund.



Following our newsletter from April 2021, we are pleased to inform you that a Luxemburg based listed SICAV fund (“the claimant”) received a positive withholding tax (WHT) refund decision from the Administrative Court of Helsinki (“the Court”) on 29th of October 2021. The decision relates to the early 2000’s when Finland applied the “avoir fiscal” system to dividend taxation, during which period the claimant received dividends from Finnish entities.

The Court reasoned that considering that the claimant is an open-end investment fund with variable capital and that its units are traded at an exchange, the claimant is comparable to a tax-exempt Finnish investment fund. This is the first time that a Finnish court recognizes that a SICAV should be treated as a fund, rather than as a company. The Court’s decision regarding the comparability of SICAVs with Finnish funds was influenced by the ruling of the Court of Justice of the European Union (“CJEU”) in case C-480/19 and as a result, it held that it was contrary to art. 63 TFEU to levy WHT on the dividends received by the claimant.   

In addition, the Advocate general has recently issued a positive opinion in case C-420/323, stating that the new Finnish tax legislation concerning the tax exemption of foreign investment funds contains a restriction of the free movement of capital enshrined in the Treaty on the Functioning of the European Union (“TFEU”).

KPMG Comments

Although the claim concerned tax years during which the Finnish corporate dividend taxation system was different from the one presently in place (where dividends between listed companies are tax exempt), the Court’s decision also supports that the claimant should be refunded the excess WHT that was charged.

To secure a timely reimbursement of the WHT paid as well as the potential late interest due from the Finnish tax authorities (accruing from the early 2000’s), it is advisable for you to file an appeal as soon as possible against the tax administration’s negative decision received in the past.   

It is important to note that the Finnish tax administration may still file an appeal against the Court’s decision, within the deadline of 60 days from the end of October. Accordingly, the Court’s decision will be legally enforceable around the upcoming year-end. The Finnish tax administration would need to file an application for a leave-to-appeal (typically granted by the Supreme Administrative Court in cases with precedential value), followed by the appeal itself. In the present situation, considering that the need for a precedent concerning a SICAV’s comparability to Finnish funds is diminished due to the CJEU’s ruling in C-480/19 as well as the Advocate General’s Opinion in C-342/20, it is likely that the Supreme Administrative Court would not grant a leave to appeal for the tax administration.

In the light of the foregoing, we highly recommend continuing filing WHT reclaims for non-listed SICAV. A team of tax specialist and project managers can assist you with filing these WHT reclaims.  

Should you have any questions/comments, do not hesitate to contact us.