The Healthcare of Ontario Pension Plan is appealing a Dutch tax court ruling against the investment organization.
Th court backed the investigation of a tax inspector, arguing that in 445 transactions between 2013 and 2018, the investment organization wasn’t the beneficial owner of local shares that paid investor dividends and, therefore, couldn’t reclaim tax withheld against them, according to a new ruling.
“As the issue is still before the courts, HOOPP cannot comment any further on this matter,” spokesperson Scott White said in an emailed statement to Benefits Canada. “This initial ruling on events that occurred between 2013 and 2018 will have no impact on HOOPP’s ability to pay pensions to our members today or in the future.”
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The Dutch tax court upheld a tax inspector’s perspective arguing the HOOPP made a mistake in claiming about $346 million of dividend tax refunds. In a statement last year, the investment organization said it has been cooperating with the tax authority for years on this issue and disputes the interpretation of a Dutch tax provision, which it believes should be solely adjudicated by a tax court.
According to a report by the Globe and Mail, Dutch authorities are arguing the investment organization used “sophisticated contracts with counterparties to exploit its tax status for financial gain.”
The report also noted the investigation is pointing to an investment strategy by the HOOPP in which it sought to capitalized on its availability of 15 per cent tax on dividend distributions refunded.