UK funds could share a $5bn windfall after the European Court of Justice ruled foreign investment funds that invest in French companies should not be liable for a discriminatory withholding tax on dividends.
Prior to today's judgment, under French corporate tax law, the country levied a withholding tax of 15%, or in some cases 25%, on foreign investment funds investing in French companies, while French investment funds were exempt. However, following a ruling, UK pension funds and other investment funds that invest in French companies - including OEICs - will no longer have to pay the additional tax. The European Commission (EC) has already forced some European countries, such as Sweden and Spain to change their rules so they do not levy discriminatory withholding taxes against foreign in...
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