What changed

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the draftproposal for a Council directive on Faster and Safer Relief of Excess Withholding Taxes

(09925/2024(COM(2023)0324 – C100002/2024C90204/2023 – 2023/0187(CNS))

(Special legislative procedure – renewed consultation)

The European Parliament,

– having regard to the Council draft (09925/2024),

– having regard to the Commission proposal to the Council (COM(2023)0324),

– having regard to its position of 28 February 2024,

– having regard to Article 115 of the Treaty on the Functioning of the European Union, pursuant to which the Council consulted Parliament (C90204/2023),

– having regard to Article 115 of the Treaty on the Functioning of the European Union , pursuant to which the Council consulted Parliament again (C100002/2024),

– having regard to Rule 82 of its Rules of Procedure,

– having regard to Rulethe 84report andof 86the ofCommittee itson RulesEconomic ofand Procedure,Monetary Affairs (A9-0007/2024),

– having regard to the report of the Committee on Economic and Monetary Affairs (A10-0011/2024),

1. Approves the Commission proposal as amended;

1. Approves the Council draft;

2. Calls on the Commission to alter its proposal accordingly, in accordance with Article 293(2) of the Treaty on the Functioning of the European Union;

2.3. Calls on the Council to notify Parliament if it intends to depart from the text approved by Parliament;

3.4. Asks the Council to consult Parliament again if it intends to substantially amend the text approved byCommission Parliament;proposal;

4.5. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Amendment 1

Proposal for a directive

Recital 1

Amendment 2

Proposal for a directive

Recital 1 a (new)

Amendment 3

Proposal for a directive

Recital 2

Amendment 4

Proposal for a directive

Recital 4

Amendment 5

Proposal for a directive

Recital 4 a (new)

Amendment 6

Proposal for a directive

Recital 6

Amendment 7

Proposal for a directive

Recital 8

Amendment 8

Proposal for a directive

Recital 9

Amendment 9

Proposal for a directive

Recital 12

Amendment 10

Proposal for a directive

Recital 14

Amendment 11

Proposal for a directive

Recital 16 a (new)

Amendment 12

Proposal for a directive

Article 3 – paragraph 1 – point 19

Amendment 13

Proposal for a directive

Article 4 – paragraph 2 – introductory part

Amendment 14

Proposal for a directive

Article 4 – paragraph 2 – point a

Amendment 15

Proposal for a directive

Article 4 – paragraph 2 – point f a (new)

Amendment 16

Proposal for a directive

Article 4 – paragraph 2 – point g

Amendment 17

Proposal for a directive

Article 4 – paragraph 4

Amendment 18

Proposal for a directive

Article 4 – paragraph 5

Amendment 19

Proposal for a directive

Article 4 – paragraph 5 a (new)

Amendment 20

Proposal for a directive

Article 4 – paragraph 6

Amendment 21

Proposal for a directive

Article 5 – paragraph 4 – point d a (new)

Amendment 22

Proposal for a directive

Article 7 – paragraph 1 – introductory part

Amendment 23

Proposal for a directive

Article 7 – paragraph 1 – point b

Amendment 24

Proposal for a directive

Article 7 – paragraph 2

Amendment 25

Proposal for a directive

Article 7 – paragraph 2 a (new)

Amendment 26

Proposal for a directive

Article 8 – paragraph 3

Amendment 27

Proposal for a directive

Article 8 – paragraph 3 a (new)

Amendment 28

Proposal for a directive

Article 9 – paragraph 1

Amendment 29

Proposal for a directive

Article 9 – paragraph 2

Amendment 30

Proposal for a directive

Article 9 – paragraph 5

Amendment 31

Proposal for a directive

Article 10 – paragraph 2 – point a

Amendment 32

Proposal for a directive

Article 10 – paragraph 3 a (new)

Amendment 33

Proposal for a directive

Article 11 – paragraph 1 – introductory part

Amendment 34

Proposal for a directive

Article 11 – paragraph 1 – point a

Amendment 35

Proposal for a directive

Article 11 – paragraph 2 – introductory part

Amendment 36

Proposal for a directive

Article 11 – paragraph 2 – point a a (new)

Amendment 37

Proposal for a directive

Article 11 – paragraph 2 – point d

Amendment 38

Proposal for a directive

Article 11 – paragraph 2 a (new)

Amendment 39

Proposal for a directive

Article 11 – paragraph 3 a (new)

Amendment 40

Proposal for a directive

Article 13 – paragraph 1

Amendment 41

Proposal for a directive

Article 13 – paragraph 2

Amendment 42

Proposal for a directive

Article 13 – paragraph 3 a (new)

Amendment 43

Proposal for a directive

Article 15 – paragraph 1

Amendment 44

Proposal for a directive

Article 18 a (new)

Amendment 45

Proposal for a directive

Article 19 – title

Amendment 46

Proposal for a directive

Article 19 – paragraph 1

Amendment 47

Proposal for a directive

Article 19 – paragraph 1 – point a (new)

Amendment 48

Proposal for a directive

Article 19 – paragraph 1 – point b (new)

Amendment 49

Proposal for a directive

Article 19 – paragraph 1 – point c (new)

Amendment 50

Proposal for a directive

Article 19 – paragraph 1 – point d (new)

Amendment 51

Proposal for a directive

Article 19 – paragraph 1 – point e (new)

Amendment 52

Proposal for a directive

Article 19 – paragraph 1 – point f (new)

Amendment 53

Proposal for a directive

Article 19 – paragraph 1 – point g (new)

Amendment 54

Proposal for a directive

Article 19 – paragraph 1 – point h (new)

Amendment 55

Proposal for a directive

Article 19 – paragraph 1 – point i (new)

Amendment 56

Proposal for a directive

Article 19 – paragraph 1 – subparagraph 1 a (new)

Amendment 57

Proposal for a directive

Article 19 – paragraph 2

Amendment 58

Proposal for a directive

Article 19 – paragraph 2 a (new)

Amendment 59

Proposal for a directive

Article 19 – paragraph 3

Amendment 60

Proposal for a directive

Article 19 – paragraph 5

Amendment 61

Proposal for a directive

Article 20 – paragraph 1

Amendment 62

Proposal for a directive

Article 20 – paragraph 3

EXPLANATORY STATEMENT

On 28 July 2023, the Council consulted the Parliament on a proposal for a Council Directive on Faster and Safer Relief of Excess Withholding Taxes.

Your rapporteur appreciates the efforts by the Commission to improve the patchwork of withholding tax procedures and to introduce a common EU-wide system for withholding tax on dividend or interest payments. The Commission proposal rightly respects the principles of simplification, subsidiarity and proportionality and suggests a system for tax authorities to exchange information and improve cooperation with each other.

The Parliament delivered its opinion on 28 February 2024.

In doing so, the Commission makes an effort to remove tax barriers to cross-border investments, bring down burdensome, costly and lengthy procedures and improve conditions to reduce the risks of tax fraud and abuse. With these suggestions, the Commission makes another step forward towards the completion of the Capital Markets Union. However, the success of FASTER depends on the commitment of Member States' they need to speed up efforts in providing digitalized, automated and better-coordinated key features.

On 14 May 2024, the Council reached a general approach on the draft Directive.

Your rapporteur recognizes that this proposal is a first step towards making withholding tax claims more streamlined and efficient across the EU, however, sees room for improvement regarding the application of the advantages of the proposals towards investors and taxpayers, which should be further explored in a comprehensive review procedure. In particular regarding possible measures to facilitate self-processed withholding tax claims for small investors, a comprehensive analysis on the development of service fees charged by financial intermediaries, as well as an examination on the universal application of a relief at source system in all Member States. Furthermore, your rapporteur sees room for being more precise in the areas of clarifying the interaction between FASTER and the UNSHELL Directive, of better protecting personal data of tax payers, and of a coordinated understanding of "comparable legislation" when it comes to the registration of a third country financial intermediary.

However, given fundamental differences between the 19 June 2023 text of the Commission on which the Parliament was initially consulted and the text unanimously agreed in Council, the latter decided to re-consult the Parliament.

According to the agreed text by the Council, the directive will introduce a common EU digital tax residence certificate (eTRC) and two fast-track procedures complementing the existing standard refund procedure for withholding taxes, as proposed by the Commission. However, the deadlines for the issuance of the eTRC and the quick refund system have been prolonged, making the tax relief ‘less fast’ than originally foreseen by the Commission’s proposal.

A key change is the exemption provided to Member States who already have a comprehensive relief-at-source system in place and who have a relatively small financial market, i.e. when their market capitalisation ratio is below a threshold of 1,5% (as reported by ESMA).

The Directive further introduces a reporting obligation for financial intermediaries, who will have to register in national registers established pursuant to this Directive in order to be able to request the fast-track procedures. The Council agreed to create a European Certified Financial Intermediary Portal to simplify the procedure.

Finally, the Council agreement extends the original deadline for the entry into force of 1 January 2027, as foreseen by the Commission’s proposal, to 1 January 2030.

In its letter requesting re-consultation, the Council is asking the Parliament to deliver its opinion as soon as possible and by 31 January 2024 at the latest. This is because Member States want to start working, together with tax authorities, the Commission and business stakeholders, on implementing acts. These implementing acts should, for instance, lay down standard computerised forms, including the linguistic arrangements, and technical protocols, including security standards, for the EU-wide eTRC.

The text agreed in the Council, although not fully in line with the EP opinion, still introduces a faster tax relief process compared to the current situation. The introduction of an electronic tax residency certificate (eTRC) was supported by the Parliament, Council, and the Commission.

Overall, the deal struck by the Council is not only a step in the right direction towards facilitating cross-border investments and completing the Capital Markets Union (CMU). It also introduces some important measures to detect potential tax fraud or abuse in relation with withholding taxes.

However, it is regrettable that the Council decided to postpone the entry into force until 2030, given the current importance of the completion of the CMU, as recently highlighted by the reports by Mario Draghi and Enrico Letta. In view of legal certainty and citizens’ interest to have a faster withholding tax refunding process, the Council should adopt quickly the COM(2023)0324 proposal on Faster and Safer Relief of Excess Withholding Taxes.

Taking into account the time needed to transpose the Directive in Member States’ legislation and the political will to speed up its adoption, your rapporteur proposes that Parliament approves the proposal without amendments pursuant to a simplified procedure without amendments (rule 52).

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

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The list above is drawn up under the exclusive responsibility of the rapporteur.

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