German pension funds may claim refunds for overwithheld US tax

June 2012


This alert summarizes an important opportunity for certain German residents to file refund claims with the IRS for overwithheld taxes with respect to the receipt of certain US source dividends. The US and German Competent Authorities recently reached an agreement not to tax, pursuant to Article 10(3)(b) of the 1989 United States-Germany Tax Treaty, as amended by the 2006 Protocol (the Treaty), dividends from investments made by certain US or German pension funds specifically listed in the Competent Authority Agreement (as explained in PwC's May 3, 2012 US Tax Treaty Alert (US-German Competent Authority Agreement addresses characterization of foreign pension funds).

The Agreement clarifies the meaning of the term ‘pension fund’, as defined in Article 10(11) of the Treaty, and applies to all open tax years to which the Treaty applies (as discussed in PwC's May 3, 2012 alert).

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