France recognizes WHT refund claim for UK fund

What happened and key impact

The French tax authorities have recently granted withholding tax relief to a UK-regulated investment fund (UK OEIC/UK UCITS scheme) in relation to French-source dividend income. This is the first positive decision after Brexit occurred.

The favorable outcome is an encouraging development for UK investment funds that have suffered French withholding tax and are considering whether refund claims may be available. While each case must be evaluated on its own facts and circumstances, the outcome may provide additional support when assessing potential recovery opportunities.

Potential implications for fund managers

Review historic French withholding tax suffered by UK investment funds.
Identify open years that may still be eligible for refund claims.
Assess whether the fund is comparable to an eligible French investment vehicle.
Confirm the applicable filing route, limitation periods and supporting documentation.
Consider whether refund or relief-at-source mechanisms may be available, subject to the relevant.

How KPMG can help

KPMG's Fund Taxation team can assist investment funds and asset managers with:

Reviewing eligibility for French withholding tax refunds.
Quantifying potential recovery opportunities.
Preparing and submitting refund claims.

Managing interactions with the French tax authorities.
Assessing potential relief-at-source implementation.
Monitoring developments affecting UK and other non-EU investment funds.

Key takeaway

This development is an encouraging signal for UK investment funds seeking to recover French dividend withholding tax. It does not guarantee success for other funds, but it highlights the importance of reviewing historic withholding tax positions and preserving potential claims before the relevant statutory deadlines expire.