EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
Recent Searches
In May 2024, the Council of the EU reached political agreement on a Directive[1] (also referred to as FASTER) setting forth rules that aim to make withholding tax (WHT) procedures in the EU more efficient and secure.
Currently, the fragmented framework of WHT procedures in the EU raises obstacles for investors and financial intermediaries involved, for example, through burdensome administration or raising tax fraud and abuse issues.
The following key changes are proposed:
- Common EU digital tax-residence certificate to be issued by the Member State of residence within 14 calendar days after a request is submitted
- Choice for Member States between "relief-at-source" procedure and a "quick-refund" system, or a combination of both, to be applied to WHT that a Member State can withhold on dividends from publicly traded shares and, where applicable, interest from publicly traded bonds[2]
- Standardized reporting process that imposes common reporting obligations on certain financial intermediaries in the chain through a national register of certified financial intermediaries
It is also worth noting that the final Directive has not provided a self-contained definition of beneficial ownership. Instead, the Directive provides that the registered owner declares, when required by the source Member State, that they are the beneficial owner pursuant to the national legislation of the source Member State or a double tax treaty, where applicable.
EU Member States are expected to formally adopt the Directive after the European Parliament has weighed it. The EU Member States will then have by 31 December 2028 to transpose the Directive into national legislation, with the rules applicable for fiscal years starting on or after 1 January 2030.
[1] Council Directive on Faster and Safer Relief of Excess Withholding Taxes
[2] Possibility for Member States to maintain their current relief-at-source system if they have a comprehensive relief-at-source system and a low market-capitalization ratio