n judgment C-525/24 of 27 November 2025, the Court of Justice of the EU clarified issues concerning non-resident pension funds and corporate income tax on dividends.
The Court held that EU law prevents a Member State from requiring a non-resident pension fund to prove compliance with the substantive conditions for obtaining a refund of withholding tax on dividends solely by producing a declaration confirmed and certified by the supervisory authority of the fund’s Member State of residence.
In the case at hand, a Spanish fund without a permanent establishment in Portugal had received dividends from Portuguese companies in 2020–2021, subject to a 25% withholding tax. It first requested application of the treaty rate (15%) and later full cancellation and refund of the withholding tax, arguing that it met the substantive conditions of Portuguese law. That law requires, for immediate exemption, a declaration certified by the supervisory authority of the residence state and—if withholding has occurred—a refund request within two years.
The referring court asked whether these evidentiary requirements for non-resident funds are compatible with Article 63 TFEU (free movement of capital) and whether, in case of difficulties for the taxpayer in obtaining proof, Portuguese authorities must use EU administrative-cooperation mechanisms.
The Court reaffirmed that evidentiary requirements may constitute restrictions if they deter cross-border investment. Imposing on non-resident funds alone the obligation to submit a certified declaration introduces administrative burdens not imposed on resident funds and therefore constitutes a prohibited restriction, unless justified under Article 65 TFEU. In this case, resident and non-resident funds are comparable as regards substantive conditions; the difference concerns only the method of proof.