This video has been produced by KPMG's EU Tax Centre and explains the basic principles of "net taxation" claims. The net taxation argument is based on the EU case law principle that, in certain cases, non-residents should not be taxed more heavily than residents. Under this principle the European Court of Justice has held that in taxing non-residents a Member State must allow the deduction of directly related expenses if and to the extent a resident would be able to deduct such expenses and be liable to a lower tax burden in that State than the non-resident. KPMG believes this case law should also be applied in the context of investment income such as portfolio dividends, interest and royalties.

Click here to view this video (Windows Media player).