Market Insights: EU Council Reaches Agreement on FASTER Directive

On May 14, 2024, ECOFIN reached a crucial agreement on the proposal for the "Faster and Safer Relief of Excess Withholding Taxes (FASTER)" directive. This directive represents a significant step forward in harmonising withholding tax procedures across EU countries, aimed at removing tax barriers to the Capital Markets Union (CMU).

Once formally adopted by the Council, the FASTER directive will bring about several key changes:

• Common EU digital tax residence certificates will replace burdensome paper-based procedures.
• Streamlined fast-track procedures for withholding taxes on dividends will benefit investors.
• National tax authorities will be equipped with additional mechanisms to combat fraud, enhancing due diligence and verification processes.

Once the proposal is formally adopted by the Council,?implementing acts, national legislations and administrative guidance will need to be prepared so that Member States transpose the directive into national legislation by 31 December 2028, to become applicable from 1 January 2030.

This initiative holds immense potential to rectify inefficiencies, eliminate double taxation, and foster deeper integration of EU capital markets. As we look towards the future, we hope that Member States will implement the proposal effectively, keeping sight of our long-term goals and the importance of a seamless tax framework for cross-border investment.

For more information on this development or withholding tax recoveries in general, contact WTax:

T:?+44 203 961 7500?E: [email protected]

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