On the proposal for a Council directive on Faster and Safer Relief of Excess Withholding Taxes
ECON-PR-752746
Committee on Economic and Monetary Affairs · Rapporteur: Herbert Dorfmann
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The draft report approves the Commission proposal for a directive on Faster and Safer Relief of Excess Withholding Taxes, as amended. It sets out Parliament's amendments to the proposal.¶ The amendments extend the deadline for issuing electronic tax residency certificates to three working days, delete a provision on additional information, and require the Commission to issue guidance on comparable legislation for third-country financial intermediaries.¶¶¶ The amendments also change the evaluation cycle to every three years, require the Commission to examine measures for small investors, service fees, and a relief at source system, and shorten the data retention period to five years.¶¶¶
Committee position. The rapporteur proposes to approve the Commission proposal as amended, with changes to eTRC issuance time, evaluation frequency, data protection, and other aspects.¶
Key points
- Parliament approves the Commission proposal as amended and calls on the Commission to alter its proposal accordingly.¶¶
- Member States must issue the eTRC within three working days from submission of a request, instead of one.¶
- The requirement to include additional information in the eTRC for purposes other than relief of withholding tax is deleted.¶
- If more than three working days are required to verify tax residency, the Member State must inform the requester of the additional time needed and the reasons.¶
- The Commission shall issue guidance on minimum standards for comparable legislation for third-country financial intermediaries.¶
- The Commission shall evaluate the Directive every three years, with a report by December 2031 and every three years thereafter.¶
- The evaluation report shall examine measures for small investors' self-processed claims, analyze service fees charged by financial intermediaries, and examine a relief at source system for all Member States.¶¶¶
- Member States shall communicate relevant information to the European Parliament and the Commission for the evaluation.¶
- Data subject rights under Articles 15 to 19 of Regulation (EU) 2016/679 may be restricted only if exercising them may jeopardise investigations and only as strictly necessary.¶
- Personal data processed under the Directive shall be retained no longer than five years, instead of ten.¶
Who is affected
- Financial intermediaries, including large institutions and central securities depositories, are affected by registration requirements and guidance on comparable legislation.¶¶
- Taxpayers and investors benefit from faster eTRC issuance and potential measures for small investors.¶¶
- Member States' tax administrations are affected by the three-working-day deadline and data retention limits.¶
Legal basis: Article 115 of the Treaty on the Functioning of the European Union¶