AMSTERDAM, 18 April 2010 – Following a judgement from the Spanish High Court, a number of Dutch pension funds are entitled to a refund of possibly millions of euros of Spanish dividend withholding tax. According to the Spanish High Court, the Spanish dividend withholding tax levied constituted a restriction on the free movement of capital and, as such, is in conflict with EC law. Legal proceedings were initiated by a number of Dutch pension funds, among which the pension fund for employers and employees in service of the Dutch government and the educational sector (ABP) and the pension fund for the engineering, mechanical and electric contracting sector (Pensioenfonds Metaal en Techniek), assisted by the law firms Cuatrecasas in Spain and Loyens & Loeff N.V. in the Netherlands.

After years of legal proceedings, the Spanish High Court has decided in favour of the pension funds. It is unusual that the Spanish High Court took this decision itself, without prior consultation with the European Court of Justice in Luxembourg. The Spanish High Court is therefore very certain about its ruling and does not see any room for doubt. The exact amount of the possible tax refund is still unknown. The Spanish State has appealed to the Spanish Supreme Court regarding the Spanish High Court’s decision.

‘ABP has secured its rights over a long period of past years’ says Guus Warringa on behalf of ABP. This also applies to the other pensions funds. ‘Claims can be filed for a number of past years. For Spanish dividend tax withheld after 1 January, 2010, the Spanish law recently provides for a refund for pension funds established in the EU. Inasmuch as they can, it would be wise for other pension funds to also try to secure their rights for the year 2009 and foregoing years’ add Ronald Wijs of Loyens & Loeff and Antonio Barba of Cuatrecasas. ‘We have always believed we had a good case, otherwise we would not have started legal proceedings’ says Bernard Bruggeman of Mn Services, Pensioenfonds Metaal en Techniek’s management organisation. ‘Moreover this is an important development since other EU countries face the same issues’ says Professor Dennis Weber of Loyens & Loeff. ‘We are  monitoring such developments very carefully, along with a number of other EC-law specialists in other European countries with whom we closely cooperate’ he concluded.