Current Tax Developments - The Netherlands

An administrative ruling, dated January 31, 1996 has cancelled a previous ruling, dated November 24, 1971, that provided for the transfer of the specific tax credit attached to French dividends ("avoir fiscal") to the UCITS and to the mutual funds established in Germany, the United Kingdom and the Netherlands. The 1996 ruling also provide for a new tax regime for French dividends received by Dutch entities.

Dutch UCITS that are not subject to taxation in the Netherlands may obtain the transfer of the "avoir fiscal" attached to the dividends received from a French company listed on a regulated stock exchange. However, the transfer of the "avoir fiscal" is only in proportion with the share in the capital of the Dutch UCITS that is held by Dutch tax residents. Dutch pension funds may also be granted the transfer of a part of the "avoir fiscal" attached to dividends distributed by a French company. A Dutch pension fund may be reimbursed an amount of "avoir fiscal " equal to the