TAX: Refund of EU taxes

See our Profiles in the CFR eversion 

Has your Investment Company suffered withholding tax on EU source dividend income? 

Reclaim of EU Withholding Tax by Offshore Funds 


The opportunity: Opportunities are available in a number of countries where a non-resident investment fund has been taxed at a rate higher than a resident fund. Recent decisions of the European Court of Justice (ECJ) have been ruling in favor of the nondiscriminatory withholding tax (WHT) arguments of claimants, thus opening the doors for non-EU based vehicles, such as Cayman Island investment funds, investing in European securities, to claim a recovery of WHT suffered on EU source dividend income, which, if successfully pursued, could result in significant tax repayments.

The approach: KPMG firms adopt a phased approach to considering the claims. We offer both a wide-ranging and limited scope service taking claimants from the awareness phase through to settling a claim. We take the view that potential claimants should evaluate their position as soon as and in many (but not all) cases it may make sense to take some form of action in one or more territories. However, pursuing a claim is not an automatic decision – a full understanding of the facts and circumstances is required.

The team: Pursuing WHT Claims can mean taking action in multiple jurisdictions within the EU. KPMG Cayman Islands, working with KPMG member firms have established experienced teams in all key claim territories. KPMG offers a comprehensive service to enable claim filing across multiple jurisdictions, while clients will have one central contact in their home jurisdiction throughout the claim process.

KPMG has extensive experience advising on EU law based claims. We have advised on a number of cases ruled on by the ECJ and have further cases before the court.

KPMG can assist you in filing claims in all countries that infringe EU law by applying a discriminatory tax treatment to cross-border dividend distributions. If you are interested in a tailor-made solution for your fund, or if you simply want to learn more about how to lodge a successful claim, we encourage you to contact us.

Our tax practice: KPMG’s tax practice in the Cayman Islands focuses on providing US tax compliance and advisory services to Alternative Investment clients. Additionally, we work alongside other KPMG affiliates to provide UK, German and Swiss tax reporting information to European investors in Cayman Islands funds as required.


FATCA – Be prepared

As the fund industry prepares for the arrival in 2013 of the FATCA regulations, KPMG has established a core FATCA team in Cayman and works closely with KPMG’s Global team on FATCA engagements for clients in the Caribbean.

Melissa M. O’Connor
Senior Manager, Tax
PO Box 493 Century Yard,
Cricket Square
Grand Cayman KY1-1106
Cayman Islands

T: +1 (345) 815 2676
E: [email protected]

Melissa is a Senior Tax Manager in the Alternative Investment Tax Group . Melissa oversees US tax compliance and advisory services for hedge funds and private equity funds and advises on a wide range of partnership tax issues. Melissa leads our practice in the area of the EU Withholding Tax Refund.