Fund Taxation Alert 2022-07

Finland: Luxembourg non-listed SICAV obtains full withholding tax refunds by the Finnish Tax Authorities

Luxembourg non-listed SICAV obtains full withholding tax refunds by Finnish Authorities

The Finnish tax authorities (FTA) have accepted the EU law-based comparability of non-listed Luxembourg SICAV corporate funds with Finnish tax-exempt contractual funds. As a result, FTA has granted the SICAVs full withholding tax (WHT) refunds with respect to Finnish-sourced dividends.


On 7 April 2022, the Court of Justice of the European Union (CJEU) through the judgment C-342/20, took the view that a French corporate fund was in a comparable situation with a Finnish contractual fund. As a result, CJEU concluded that the Finnish statutory investment fund tax-exemption regime, that applied solely to contractual investment funds, was contrary to the free movement of capital as provided for under Article 63 of the Treaty on the Functioning of the European Union.

KPMG Observation

These refund decisions towards foreign corporate (i.e., including non-listed SICAV) change the Finnish non-resident investment fund tax practice.

This is important in light of the fact that the FTA were denying WHT reimbursements to certain types of corporate funds (i.e., non-listed corporate funds), by using the legal form as the criterion to sustain the non-comparability of foreign funds with Finnish funds:

  • SICAV fund is a corporate form fund with separate legal personality.
  • Finnish tax-exempt funds are contractual arrangements between the management company, the custodian, and the investors without separate legal personality and independent liability in general.

This decision to finally grant the full WHT refund confirms that the legal form of an investment fund should not be considered when assessing the comparability between domestic and foreign investment fund. This principle had already been set forth by the CJEU in the Aberdeen judgement (C-303/07) of 18th of June 2009 and has now finally been endorsed by the FTA.

One important aspect to consider and monitor in the future is the fact that these new decisions were rendered for UCITS funds and thus it remains to be seen whether the cases concerning non-UCITS funds, and those SICAV funds that fall outside the scope of UCITS and AIFM Directives, will be similarly resolved. 

Consequences and recommendations

These decisions indicate that SICAVs whether listed or unlisted should be considered comparable to Finnish investment funds. Consequently, all unlisted SICAVs and other foreign corporate funds are advised to apply for a claim for adjustment regarding the negative decisions they have received concerning WHT claims.

A dedicated team of tax advisers and project management experts could support you to process WHT claims in Finland.