International Taxation

European Commission Directive proposes faster and safer withholding tax procedures

ATOZ Tax Advisers, Taxand Luxembourg, explores the implications of the European Commission’s Proposal for a Council Directive on Faster and Safer Relief of Excess Withholding Taxes. With this new initiative, the Commission aims to tackle the current particularly burdensome withholding tax refund procedures for cross-border investors in the EU and, at the same time, the risks of tax abuse related to refund procedures revealed notably by the Cum/Ex and Cum/Cum scandals.

The proposal, which was published on 19 June 2023 by the European Commission, aims to create:

  • Common EU digital tax residence certificates;
  • Standardised reporting obligations for financial intermediaries to provide national tax administrations with the necessary tools to check eligibility for the reduced rate and to detect potential abuse; and
  • Two fast-track procedures, assorted with new due diligence obligations, complementing the existing standard refund procedure to relieve any excess WHT that can be withheld by a Member State on dividend or interest income paid on shares or bonds traded publicly to non-resident investors.

Read more from our colleagues at ATOZ as they analyse the impact of the Directive proposal here.

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