The £800 million ($1.2 billion) Highland Council Pension Fund, Inverness, Scotland, announced last month that it is seeking to reclaim millions of euros in wrongly withheld taxes on investment returns.
Kit Dickson, senior manager, international tax services for KPMG LLP in Manchester, England, said the firm represents more than 100 funds in the U.K., including Highland Council, looking to get back taxes that were charged unfairly.
“There are a number of (court) decisions that are leading to refunds across the European Union,” Mr. Dickson said. Courts have ruled that prior practices of charging different tax rates for foreign and domestic pension funds did not fit with European law; however only Poland and the Netherlands have begun returning cash, he said.
A £5 billion pension fund likely could expect to reclaim at least £10 million across all markets, he said. In 2009, the £9.4 billion Strathclyde Pension Fund, Glasgow, Scotland, won a €2.3 million ($3.1 million) refund from the Dutch government alone.
Mr. Dickson said U.S. funds might also be able to reclaim wrongfully charged taxes. “To date, we have only seen claims succeed for EU-based pension funds, but I do know pension funds (outside the EU, including those in the U.S.) have started filing these refunds as well,” he said. — Drew Carter
