Italian Withholding Tax Group Claim

Omni Bridgeway is investigating a proposed action supporting and funding non-EU investors (either investment funds or corporate entities) to seek reimbursement of Italian withholding tax (WHT) applied to dividends distributed by Italian companies (at the source) and suffered by such funds.

The action represents a significant opportunity for institutional shareholders to recover meaningful sums for the fund investors which have been unduly retained at their expense, with proceedings hinging on an inconsistent application of withholding tax by the Italian tax authority, in breach of Italian and EU law (therefore not implying a proper merits based litigation against the Italian state), following in the steps of other funds that have already obtained the reclaimed amounts.

Omni Bridgeway is proposing to fund and manage a coordinated series of reclaim actions, with all legal advice led by Tremonti Romagnoli Piccardi e Associati (“TRP”), one of Italy’s most respected tax litigation firms.

Reclaims can be filed for WHT paid in the past 48 months on a rolling basis, making the opportunity both significant and time sensitive.

Background

Under Italian law, Italian (and, more recently, EU) investment funds receive dividends free of withholding tax, while extra-EU funds suffer withholding tax between 15% and 26%, depending on treaty eligibility.

This differential treatment has been deemed incompatible with Article 63 of the Treaty on the Functioning of the European Union (“TFEU”) (free movement of capital) by both the Court of Justice of the European Union and, more recently, various Italian Supreme Court (Corte di Cassazione) judgments concerning US investment and pension funds.

These precedents have affirmed that:

Non EU funds may be objectively comparable to Italian funds when they are regulated/supervised; and
Refunds cannot be denied where an effective exchange of information system between Italy and the fund’s home jurisdiction exists (this requirement is met by US, UK, Canada [but also Cayman Islands…]).

TRP has recently secured several full refunds for non EU funds—including US pension funds—in cases based on these same principles.

How Much Will it Cost to be a Part of the Class Action

Proposed funding and participation will be offered on a “no win, no pay” basis:

Omni Bridgeway will fund all costs of the reclaim proceedings, including legal fees.
Omni Bridgeway will bear the financial risk of the duration of the proceedings and of an unsuccessful outcome, including the other side’s legal costs if the reclaim is unsuccessful.
Claimants will pay no fees unless a recovery is obtained.

If the matter is successfully resolved and there is a recovery of compensation (a “Resolution Sum”), Omni Bridgeway will be entitled to reimbursement of their costs of the matter that they have funded plus a commission from the judgment or settlement amount, pursuant to the terms of the funding agreement. Omni Bridgeway’s return will be paid in priority (before) the claimants receive their respective entitlement to the Resolution Sum.

How Do I Sign Up

Each individual reclaim will have to be filed and processed independently. This means that all entity that paid WHT on dividends received from Italian companies are required to sign a litigation funding agreement to initiate the proceedings, and to obtain the benefit of Omni Bridgeway’s funding and adverse cost protection.

If you wish to register your interest, please contact the Omni Bridgeway Client Liaison Team by email on [email protected].