The newf Healthcare of Ontario Pension Plan (HOOPP) logo, at the company’s offices in Toronto, Monday, July 28, 2025. (Galit Rodan/The Globe and Mail)Galit Rodan/The Globe and Mail
A Dutch prosecutor is investigating Healthcare of Ontario Pension Plan (HOOPP) and a former employee, alleging the fund evaded more than €200-million ($325-million) of taxes on dividend income over a five-year span.
The Netherlands Public Prosecution Service said in a statement Friday that it is “summoning a foreign pension fund” to a criminal court on a suspicion that the pension plan wrongly claimed refunds on dividend tax withheld between 2013 and 2018.
The statement did not name the pension fund, but HOOPP confirmed Friday that it is the subject of the investigation and said in a statement that it “firmly rejects” the allegations.
“HOOPP is surprised and disappointed by this decision and will vigorously defend itself against these allegations,” the statement said.
The Dutch prosecutor’s allegations stem from a separate audit undertaken by the country’s tax authorities starting in September, 2019. That led to civil allegations against HOOPP that the pension fund wrongly reclaimed withheld dividend taxes.
The key question in the civil matter was whether HOOPP was the beneficial owner of the shares that produced the dividend income, and entitled to claim back the tax on those dividends.
The Netherlands withholds a 15-per-cent tax on dividend distributions made by Dutch entities, but foreign pension funds in countries including Canada enjoy favourable tax status that entitles them to have the tax fully refunded.
“HOOPP has been co-operating with the Dutch Tax Authority in the Netherlands for many years on this issue,” the pension fund said in its statement. “HOOPP is confident that it was the beneficial owner of the shares and therefore entitled to the tax refunds. This issue is about a dispute over the interpretation of a discrete Dutch tax provision, which HOOPP believes should be solely adjudicated by a tax court.”
HOOPP manages and invests $123-billion on behalf of nearly 479,000 nurses, medical technicians and other health care workers.
“These allegations will have no impact on HOOPP’s ability to pay pensions to our members today or in the future,” the pension fund’s statement said.
More recently, the Dutch prosecutor directed the Netherlands Fiscal Intelligence and Investigation Service (FIOD) to investigate the case as a criminal matter.
“The outcome of the investigation is that the pension fund is suspected of having reclaimed dividend tax in violation of the Netherlands Dividend Withholding Tax Act, even though it had no right to it,” the Netherland Public Prosecution Service said in its statement. “The fund is therefore suspected of tax evasion. Investigation into a former employee is still ongoing.”
A spokesperson for the Dutch public prosecutor declined to name the pension fund under investigation. The prosecutor is alleging that the fund temporarily held Dutch shares owned by another shareholder during the period that dividends were declared and paid, then claimed a full refund of the 15-per-cent tax.
The spokesperson alleged that some of the refunded tax was shared with the original shareholder, and the shares were then sold back to that shareholder through complicated derivatives structures.
The spokesperson said the public prosecutor considers the alleged actions a criminal offence that deprived the Dutch treasury of tax revenue, but declined to provide details about the identity of the other shareholder, or about the potential penalties the pension fund could face. The allegations have not been tested in court.
Dutch financial newspaper Het Financieele Dagblad, also known as FD, earlier reported details of the prosecutor’s allegations.
The allegations relate to a large number of trades that HOOPP made in the Netherlands, and for which it claimed refunds for the withheld tax over the five-year span, according to a source with knowledge of the matter.
The Globe and Mail is not identifying the source because they were not authorized to discuss confidential proceedings with the tax authorities.
HOOPP does not believe that the fund did anything improper, and the former employee - who was based in Toronto - did not leave the fund as a result of the tax investigation, the source said.
In 2019, tax authorities in Denmark also took HOOPP to court over a dispute about whether the pension fund improperly claimed hundreds of millions of tax rebates on dividends from Danish stocks. That civil case, which is still continuing, focused on whether HOOPP was the true beneficial owner of the shares, and did not allege any fraud.