Investment funds across the EU can expect refunds of millions of euros from taxes levied on dividends following a ruling in Norway.
The Norwegian government decided this week to refund withholding taxes to a Luxembourg SICAV.
Teresa Owusu-Adjei, UK asset management tax leader, PricewaterhouseCoopers (PwC), says: "The refund runs into tens of millions of euros, plus interest for the Luxembourg SICAV which is a significant win for the fund.
"While the UK does not have a tax regime which applies withholding tax on dividends many investors in asset and pension funds in Europe will be pleased to hear the outcome of this case."
She says the values to be reclaimed will be "significant", adding they would come as a welcome return to those investors who find they have been unlawfully treated.
In a landmark case in June 2009, the European Court of Justice (ECJ) issued its final judgment in the Aberdeen Property Fininvest Alpha Oy case in favour of the taxpayer.
The ECJ ruled withholding tax on dividends paid to non-resident investment funds while exempting domestic investment funds discriminatory, and in breach of the European Community Treaty.
The ruling led the way for other cases where withholding tax on dividends has been levied.
Other European countries including France, Germany, Italy, Spain and Belgium apply withholding tax on dividends paid to funds, while exempting their domestic funds from such taxes.
PwC says this week's settlement sets a precedent for other fund claimants to come forward with a case of unlawful treatment under EU Law.
Owusu-Adjei adds: "Both the Aberdeen ECJ ruling and this settlement with the Luxembourg SICAV will have a significant impact on the current withholding tax on dividends regimes applied in EU and EEA jurisdictions, ensuring a level playing field for all funds"
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till