UK investment funds could be in for a €20bn tax rebate after a European Court of Justice ruling preventing overseas funds being treated differently to French funds, according to professional services firm PwC.

PwC said that prior to today’s judgment French corporate tax law levied a withholding tax of 15 per cent, or in some cases 25 per cent, on foreign investment funds investing in French companies, though French funds were exempt.

However, the firm said the ruling prevents this discrimination, and will set a precedent meaning other EU countries that levy withholding taxes will be unlikely to be able to continue to do so.

PwC tax partner Teresa Owusu-Adjei said that the measure is welcome in the current difficult economic climate.

“Investment funds that may have paid this withholding tax any time over the last five years should investigate now as to whether they are able to claim rebates. Europe-wide these claims could amount to as much as €20bn so it is in funds’ interests to act now.”

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