Advocate general ‘puts final nail’ in dividend tax plan coffin

Advocate general ‘puts final nail’ in dividend tax plan coffin

SINT MAARTEN/THE NETHERLANDS – Legal cases brought by foreign firms in which they dispute the tax on dividends do not stand a chance in court, the advocate general says in a legal opinion to the Dutch supreme court.

The recommendations are in the hands of both the Financieele Dagblad and Trouw, and both papers say they are the final nail in the coffin of the government’s plans to scrap the tax on dividends.

On Friday the government said it would rethink its entire corporate tax strategy following Unilever’s decision not to consolidate its headquarter operations in Rotterdam.

This includes the controversial plan to scrap the tax on dividends, which largely affects foreign firms. The government has said the threat of the court cases was another reason to scrap the tax.

The two papers say 7,000 companies are now involved in court cases and are claiming back some €1.5bn paid in dividend tax over the past few years by citing European law.

One case has been taken to the supreme court for its opinion, hence Wattel’s involvement. In his briefing the advocate general says the Dutch tax does not conflict with EU rules on free capital movements and that foreign firms are not being discriminated against.

And should the European court of justice disagree, the government can take simple steps to rectify the situation which will not cost the treasury billions of euros, Mattel said. (DutchNews)

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