A Dutch pension fund is appealing a decision by a U.S. District Court in Washington rejecting claims that it should not have to pay taxes on profits from U.S. investments. K. Peter Schmidt, a partner at Arnold & Porter, a Washington law firm representing the Dutch pension plan, filed the appeal late yesterday.
The ruling by U.S. District Court Judge J. Richey against Stichting Pensioenfonds Voor de Gezondheid contradicts an earlier decision by a federal appeals court. The appellate court had ruled that collectively bargained organizations do not have to pay taxes on their U.S. investments, even if they fail to meet IRS qualifications for pension plans. The Dutch multiemployer plan representing health care workers sought a refund of $8.5 million in taxes paid to the IRS for earnings on U.S. investments in 1993.
Under U.S. law, foreign investors generally must pay 30% taxes on profits they make on U.S. investments unless they can prove they are tax-free organizations.
