The European Court of Justice (ECJ) recently raised the issue of whether it is possible for investment funds to reclaim European withholding taxes. Under the laws of several EU Member States, foreign investment funds cannot benefit from favourable tax regimes designed for domestic investment funds. As a result, non-resident investment funds end up paying higher taxes on dividends than resident investment funds. This dissuades foreign investment funds from investing in other Member States and domestic companies in attracting capital from foreign investing funds. This paper explores the ramifications and recent developments in this key issue, and identifies the opportunities this brings to our clients.