What changed

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

SPECIAL LEGISLATIVE procedure

Follow up to the European Parliament legislative resolution on the proposal for a Council directive on Faster and Safer Relief of Excess Withholding Taxes

(COM(2023)0324 – C90204/2023 – 2023/0187(CNS))

1. Rapporteur: Herbert DORFMANN (EPP / IT)

(Special legislative procedure – consultation)

2. Reference numbers: 2023/0187 (CNS) / A9-0007/2024 / P9_TA(2024)0102

The European Parliament,

3. Date of adoption of the resolution: 28 February 2024

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

4. Legal basis: Article 115 of the Treaty on the Functioning of the European Union

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

5. Competent Parliamentary Committee: Committee on Economic and Monetary Affairs (ECON)

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

6. Commission's position: The Commission takes note of the amendments proposed by the European Parliament, while reserving its detailed position on these while the discussion in the Council is ongoing.

– having regard to the report of the Committee on Economic and Monetary Affairs (A9-0007/2024),

Notwithstanding this, the Commission welcomes the ambitious European Parliament opinion and underlines that it can agree with the spirit of the majority of the amendments, as these are in line with the objectives of the proposal or already under discussion in Council and reflect the underlying principles of the proposed policy choices. The Commission wishes to note, in particular, the following amendments (AM):

1. Approves the Commission proposal as amended;

• AM 31, which proposes to extend the holding period of the underlying share from which the dividend is paid from two to five days before the ex-dividend date. This amendment would improve the ability of the Member States to prevent fraud and/ or tax abuse. Therefore, the Commission could support it, should the Council agree to include this in its compromise text.

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;

• AMs 38 and 39, which relate to facilitating the due diligence procedures for financial intermediaries by producing guidelines and allowing such procedures to be undertaken on an annual basis. The Commission agrees that further harmonisation of due diligence procedures could be advisable by means of guidelines. These could be drafted by the Commission services in cooperation with experts from Member States via exchange of best practices. In the same vein, the latest compromise text clarifies that due diligence tasks can be done on an annual basis instead of on each dividend distribution event.

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

• AM 42, on introducing within the quick refund system a legitimate rejection ground based on the communication of an open verification process or tax audit. This amendment is in line with the objectives of the proposal as it provides tax administrations with a legal tool to verify the appropriateness of the refund request and, as a consequence, to better fight fraud.

4. Asks the Council to consult Parliament again if it intends to substantially amend the Commission proposal;

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

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.

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.

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.

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

Pursuant to Article 8 of Annex I to the Rules of Procedure, the rapporteur declares that he has received input from the following entities or persons in the preparation of the report, until the adoption thereof in committee:

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

PROCEDURE – COMMITTEE RESPONSIBLE

FINAL VOTE BY ROLL CALL IN COMMITTEE RESPONSIBLE