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By Laurent de La Mettrie, Partner and Carole Hein, Director at PwC Luxembourg
Investment funds generally suffer cross-border withholding taxes on revenues (mainly dividends) distributed by their underlying investments in companies throughout Europe, at either non-treaty or treaty rates. When fully taxable companies receive dividends, this withholding tax can in some cases be credited either through domestic tax law applicable to the recipient company or through the application of double tax treaties. However, funds do not always have access to double tax treaties and must suffer the full withholding tax rate which can reach 30% in some countries. In several EU countries, the outbound dividends are not taxed in the same way when paid to domestic and non-resident...
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