Withholding Taxes for UCIsUpdated on Thursday 30th June 2016
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Undertakings for collective investments (UCI) in Luxembourg are subjected to paying the withholding tax. However, this regulation is applicable in accordance with the type of UCI the investors want to establish. Our team of financial specialists can provide an in-depth presentation on the main withholding taxes applicable to UCIs in Luxembourg.
Types of withholding taxes applicable to UCIs in Luxembourg
Those who want to open a fund set up as an UCI should know that such funds are subjected to withholding taxes on the income received.
This type of tax is non-refundable (but several exceptions may apply), but in the situation of UCIs established as SICAVs, that is a type of investment company, the investors can benefit from the stipulations of the double taxation treaties signed by Luxembourg. However, this can be applied only in the situation in which Luxembourg signed an agreement for the avoidance of double taxation with the country in which the investor is a tax resident.
It is important to know that UCIs set up as investment partnership do not fall under the tax regulation applicable to SICAVs.
As a general rule, UCIs are not required to pay a withholding tax on the dividends; our team of financial experts in Luxembourg can offer more details on these taxes. The regulation referring to the non-compliance of UCIs for the withholding tax on dividends is applicable under the EU Savings Directive.
Obtain refunds on withholding tax in Luxembourg
Investors who own an UCI fund in Luxembourg can also claim a refund for the withholding tax in several situations. The refund on the withholding tax is applicable only for the dividend taxation. This can be achieved only if the European Court of Justice has decided that the taxation was discriminatory.
Several European countries have already created a legal system in which investors can file claims referring to the application of the withholding tax.
Investors who are interested in receiving more details on the level of withholding taxes applicable to UCI funds in Luxembourg can address to our team of financial consultants.