Insights

European Commission Directive proposes faster and safer withholding tax procedures

Editorial Team 07 Jul 2023

An overview from ATOZ Tax Advisers, Taxand Luxembourg

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.

Article tags

EU | Luxembourg | Tax | Tax Policy | Withholding Tax