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Europe's largest pension and investment funds could have justification to reclaim hundreds of millions of euros in taxes from EU member states, after the European Court of Justice ruled against the Dutch government in a case involving withholding taxes on dividends.

Announcing their verdict in the case on Thursday, the ECJ Judges ruled that the Dutch government had infringed European law by charging a 25% withholding tax on dividends remitted to non-residents, while Dutch nationals were exempt from such a tax.

The case was brought by Amurta, a Portuguese company, which was charged withholding tax on dividend payments from its investment in Retailbox, a Dutch company.

While the case did not involve pension or investment companies, tax advisors have suggested that these are the firms which could benefit most from the ruling because of their substantial cross-border stock holdings. Speaking to the Times newspaper with regard to the decision, Jonathan Bridges, head of international corporate tax at KPMG, suggested that claims could exceed EUR500 million from UK-based investors, and EUR400 million from German investors.

The decision follows closely that of the 'Denkavit' case last year, when the ECJ supported a Dutch company in its challenge to French withholding taxes, and follows a pattern of rulings where the ECJ has sought to uphold claims of discriminatory tax treatment of non-residents by EU governments.

However, in previous cases where tax rulings have gone against EU governments, leading to the possibility of large-scale claims by taxpayers, member states have tended to legislate around the problem by limiting claims and amending tax laws.