U.K. Wrongly Taxed BAT, Other U.K. Company Dividends (Update3)
British American Tobacco Plc, Europe’s largest cigarette maker, won a U.K. court ruling in a tax case that the company said may allow it to recover as much as 1.2 billion pounds (.9 billion). Other companies may also benefit.
High Court Justice Launcelot Henderson in London backed a 2006 decision by a European Union court and ruled that the U.K. tax system relating to foreign dividends was unfair.
“The U.K. system of taxation of dividends has at all material times infringed” European law, Henderson said in his judgment today.
More than 20 companies including BAT challenged the U.K.’s “advanced corporation tax,” which ran from 1973 to 1999, arguing it treated non-U.K. units unfairly. While BAT is the claimant, companies including Pirelli & C. SpA, Europe’s third- largest tire maker, carmaker Bayerische Motoren Werke AG, and the European unit of Sony Corp. also took part in linked cases. It’s one of several to challenge the system.
