PMT, the €60bn pension fund for the Dutch metal industry, has taken Sweden’s Inland Revenue to the European Court of Justice (ECJ) to demand equal tax treatment with Swedish pension funds.
The Dutch scheme was forced to pay a 15% dividend tax on the €50m of Swedish equities it owned between 2002 and 2006 – a levy for which Swedish pension funds are exempt.
PMT argues that national governments, as a matter of principle, should adjust their tax laws to create a level playing field between local pension funds and foreign schemes and demands a full refund.
The scheme cited success in “similar cases” in Spain and Poland, where it managed to claw back more than €1.5m in paid taxes.
The ECJ will now consider PMT’s case against Swedish tax authorities after the Dutch scheme lost an appeal in a lower Swedish court.
The Solicitor General of the European Court, however, has argued that the different tax treatment is justifiable.
He said that, although the free movement of capital within the EU means a foreign shareholder must be treated equally to a local one, if a non-resident pension fund’s position is incomparable with that of a local scheme, a different treatment is allowed.
He also pointed out that Sweden levies tax on a scheme’s total assets against projected returns to avoid affecting investment decisions through tax policy, as well as to keep tax revenues independent from the broader economy.
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