Introduction
Today, the European and Financial Affairs Council ("ECOFIN") approved Directive on Faster and Safer Relief of Excess Withholding Taxes (hereafter "FASTER").
FASTER aims at creating:
- A common EU digital tax residence certificate; and
- A standardised withholding tax
("WHT") relief proced
- 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
- A two fast-track procedure, assorted with new due diligence obligations, complementing the existing standard refund procedure to relieve excess WHT withheld by a Member State on dividend or interest income paid on publicly traded shares or bonds to non-resident investors.
On 14 May 2024, the Council already reached an agreement (general approach) on the compromise text providing for new rules for WHT procedures. Following the re-consultation with the European Parliament, FASTER has now been formally adopted by the Council and will soon be published in the EU's Official Journal.
Member States must now transpose the directive into national legislation by 31 December 2028, but the national rules will, in principle, become applicable only as from 1 January 2030.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
