ESMA report on multiple WHT reclaim schemes
On 2 July 2019, the European Securities and Markets Authority (ESMA) published its Report on preliminary findings on multiple withholding tax (WHT) reclaim schemes to respond to the European Parliament that requested ESMA to conduct an inquiry in order to analyze the problem.
Some EU Member States allow for a WHT on the dividends of listed companies, which under specific circumstances can be reclaimed. This can be abused by aiming to obtain multiple repayments of a single WHT paid upon distribution of dividends. ESMA’s initial analysis confirms that multiple WHT reclaim schemes have been reported and are being investigated in three Member States: Germany, Denmark and Austria. ESMA has identified best practices that could be used by National Competent Authorities (NCA) to detect and investigate multiple withholding tax reclaim schemes all firms. In addition, ESMA had launched an inquiry to further collect evidence from NCA across the EU.