BETA


2021/2097(INI) A European Withholding Tax framework

Progress: Procedure completed

RoleCommitteeRapporteurShadows
Lead ECON MARQUES Pedro (icon: S&D S&D) BENJUMEA BENJUMEA Isabel (icon: EPP EPP), KELLEHER Billy (icon: Renew Renew), URTASUN Ernest (icon: Verts/ALE Verts/ALE), LAPORTE Hélène (icon: ID ID), MOŻDŻANOWSKA Andżelika Anna (icon: ECR ECR), GUSMÃO José (icon: GUE/NGL GUE/NGL)
Lead committee dossier:
Legal Basis:
RoP 54

Events

2022/03/10
   EP - Text adopted by Parliament, single reading
Documents
2022/03/10
   EP - Decision by Parliament
Documents
2022/03/09
   EP - Debate in Parliament
2022/02/01
   EP - Committee report tabled for plenary
Details

The Committee on Economic and Monetary Affairs adopted an own-initiative report by Pedro MARQUES (S&D, PT) on a European withholding tax framework.

Withholding taxes can reduce the risk of tax fraud and evasion. They represent a source of revenue for Member States to finance public expenditure and are an effective tool to ensure a domestic tax base and to combat profit shifting to low-tax jurisdictions.

Despite efforts, the withholding tax system has remained largely fragmented between Member States in terms of rates and relief procedures, which has created loopholes and legal uncertainty. Moreover, the current system is abused to shift profits, allows aggressive tax planning and creates the undesirable effect of double taxation.

Putting an end to profit shifting practices

Members recalled that withholding taxes can be a defensive measure taken by Member States against countries on the EU list of non-cooperative countries and territories for tax purposes. They called on the Commission consider presenting a legislative proposal that strengthens coordinated defensive measures against countries on the list. In this respect, they stressed that consideration should also be given to the implementation of the G20/OECD agreement on a two-pillar reform, including a global effective minimum tax rate.

The Commission is invited to present a legislative proposal to apply an EU-wide withholding tax to ensure that profits generated within the EU are taxed at least once before they leave its territory.

The Commission and the Members are called on to put in place a common, standardised withholding tax framework that reduces complexity for investors, curbs treaty shopping and ensures that all relevant dividends, interest, capital gains, royalty payments, professional service payments and contractual payments generated within the EU are taxed at an effective rate.

Members noted that the absence of an effective minimum tax rate on dividend payments to shareholders has created an environment that may encourage tax evasion. They called on the Commission to analyse this issue and assess the best legislative options to address it, including the possibility of revising the Parent-Subsidiary Directive.

Stepping up the fight against dividend arbitrage

Members pointed out that the cum-ex and cum-cum schemes both involve reclaims of dividend withholding tax to which the beneficiaries were not entitled and are estimated to have imposed a total cost to taxpayers of about EUR 140 billion between 2000 and 2020.

The report called on the Commission to assess possible solutions to tackle such schemes , in particular the possibility of linking tax reclaims to the underlying dividend distribution, including by means of a unique identifier and/or by making a single entity in each Member State responsible for collecting the withholding tax and issuing the corresponding tax certificate in order to ensure that multiple tax reclaims cannot be made for the same distribution and that tax administrations can easily detect any abuse of refund procedures.

The Commission is called on to:

- analyse whether the Market Abuse Regulation has been breached and consider whether it needs to be amended;

- propose measures to strengthen cooperation and mutual assistance between tax authorities, financial market supervisors and, where appropriate, law enforcement bodies in detecting and prosecuting withholding tax reclaim schemes;

- develop appropriate measures to prevent the role of intermediaries in facilitating tax abuse and tax evasion;

- extend the mandatory exchange of information to dividend arbitrage schemes and all information on capital gains, including the granting of dividend and capital gains tax refunds.

Removing barriers to cross-border investments in the single market

Members welcomed the Commission’s intention to present, by the end of 2022, a proposal establishing a common and standardised system for withholding taxes , accompanied by a mechanism for the exchange of information and cooperation among tax administrations of Member States. They urged the Commission, with full respect for EU competences, to strive also to tackle divergences in withholding taxes in the EU.

The Commission is called on to:

- come forward with a common and standardised EU procedure for withholding tax refunds for all Member States;

- introduce as part of this harmonisation, rules on exemptions and deductions and a standardised format and process for reclaim requests, and to address the current lack of a uniform definition of ‘beneficial owner’, the lack of alignment of time periods for request and reclaim, and language barriers;

- take account of existing digital solutions in Member States, to assess how to leverage blockchain technologies to prevent tax evasion and avoidance, while fully respecting EU data protection rules, and to consider the establishment of a pilot project.

Members welcomed the Commission’s proposed option to establish a fully fledged common EU relief-at-source system, which could be a reliable solution in the long term.

Documents
2022/01/25
   EP - Vote in committee
2021/11/25
   EP - Amendments tabled in committee
Documents
2021/10/13
   EP - Committee draft report
Documents
2021/07/08
   EP - Committee referral announced in Parliament
2021/07/06
   EP - MARQUES Pedro (S&D) appointed as rapporteur in ECON

Documents

Votes

Cadre européen en matière de retenue à la source - European Withholding Tax framework - Europäischer Rahmen für die Quellenbesteuerung - A9-0011/2022 - Pedro Marques - Proposition de résolution #

2022/03/10 Outcome: +: 625, -: 38, 0: 28
DE IT FR ES PL RO EL PT BG CZ NL AT SE IE DK HR BE FI LT LV SI SK LU EE CY MT HU
Total
96
76
79
56
51
33
21
20
17
20
29
19
20
13
13
12
20
13
10
8
8
13
6
7
5
5
21
icon: PPE PPE
175

Denmark PPE

For (1)

1

Latvia PPE

2

Slovakia PPE

Abstain (1)

4

Luxembourg PPE

2

Estonia PPE

For (1)

1
2

Malta PPE

For (1)

1

Hungary PPE

1
icon: S&D S&D
141

Greece S&D

2

Czechia S&D

For (1)

1

Lithuania S&D

2

Latvia S&D

2

Slovenia S&D

2

Slovakia S&D

2

Luxembourg S&D

For (1)

1

Estonia S&D

2

Cyprus S&D

1
icon: Renew Renew
99

Italy Renew

3

Poland Renew

1

Austria Renew

For (1)

1
3

Ireland Renew

2

Croatia Renew

For (1)

1

Finland Renew

3

Lithuania Renew

1

Latvia Renew

For (1)

1

Slovenia Renew

2

Luxembourg Renew

2

Estonia Renew

3

Hungary Renew

2
icon: Verts/ALE Verts/ALE
69

Spain Verts/ALE

3

Poland Verts/ALE

For (1)

1

Portugal Verts/ALE

1

Czechia Verts/ALE

2

Netherlands Verts/ALE

3

Austria Verts/ALE

3

Sweden Verts/ALE

3

Ireland Verts/ALE

2

Denmark Verts/ALE

2

Belgium Verts/ALE

2

Finland Verts/ALE

3

Lithuania Verts/ALE

For (1)

1

Latvia Verts/ALE

1

Luxembourg Verts/ALE

For (1)

1
icon: ECR ECR
63

Germany ECR

1

Romania ECR

1

Greece ECR

1

Bulgaria ECR

2
3

Croatia ECR

1

Lithuania ECR

1

Latvia ECR

2

Slovakia ECR

Abstain (1)

1
icon: The Left The Left
39

Portugal The Left

4

Czechia The Left

1

Netherlands The Left

For (1)

1

Sweden The Left

Abstain (1)

1

Ireland The Left

Abstain (1)

4

Denmark The Left

1

Belgium The Left

For (1)

1

Finland The Left

For (1)

1

Cyprus The Left

2
icon: ID ID
64

Czechia ID

Against (1)

Abstain (1)

2

Netherlands ID

Against (1)

1

Austria ID

3

Denmark ID

Abstain (1)

1

Finland ID

Against (1)

1

Estonia ID

Against (1)

1
icon: NI NI
41

Croatia NI

Abstain (1)

2

Lithuania NI

1

Slovakia NI

2
AmendmentsDossier
170 2021/2097(INI)
2021/11/25 ECON 170 amendments...
source: 700.464

History

(these mark the time of scraping, not the official date of the change)

docs/2
date
2022-03-10T00:00:00
docs
url: https://www.europarl.europa.eu/doceo/document/TA-9-2022-0075_EN.html title: T9-0075/2022
type
Text adopted by Parliament, single reading
body
EP
events/3
date
2022-03-09T00:00:00
type
Debate in Parliament
body
EP
docs
url: https://www.europarl.europa.eu/doceo/document/CRE-9-2022-03-09-TOC_EN.html title: Debate in Parliament
events/4
date
2022-03-10T00:00:00
type
Decision by Parliament
body
EP
docs
url: https://www.europarl.europa.eu/doceo/document/TA-9-2022-0075_EN.html title: T9-0075/2022
forecasts
  • date: 2022-03-09T00:00:00 title: Debate in plenary scheduled
  • date: 2022-03-10T00:00:00 title: Vote in plenary scheduled
procedure/stage_reached
Old
Awaiting Parliament's vote
New
Procedure completed
forecasts/0
date
2022-03-09T00:00:00
title
Debate in plenary scheduled
forecasts/0
date
2022-03-07T00:00:00
title
Indicative plenary sitting date
forecasts/1
date
2022-03-10T00:00:00
title
Vote in plenary scheduled
docs/2
date
2022-02-01T00:00:00
docs
url: https://www.europarl.europa.eu/doceo/document/A-9-2022-0011_EN.html title: A9-0011/2022
type
Committee report tabled for plenary, single reading
body
EP
events/2/summary
  • The Committee on Economic and Monetary Affairs adopted an own-initiative report by Pedro MARQUES (S&D, PT) on a European withholding tax framework.
  • Withholding taxes can reduce the risk of tax fraud and evasion. They represent a source of revenue for Member States to finance public expenditure and are an effective tool to ensure a domestic tax base and to combat profit shifting to low-tax jurisdictions.
  • Despite efforts, the withholding tax system has remained largely fragmented between Member States in terms of rates and relief procedures, which has created loopholes and legal uncertainty. Moreover, the current system is abused to shift profits, allows aggressive tax planning and creates the undesirable effect of double taxation.
  • Putting an end to profit shifting practices
  • Members recalled that withholding taxes can be a defensive measure taken by Member States against countries on the EU list of non-cooperative countries and territories for tax purposes. They called on the Commission consider presenting a legislative proposal that strengthens coordinated defensive measures against countries on the list. In this respect, they stressed that consideration should also be given to the implementation of the G20/OECD agreement on a two-pillar reform, including a global effective minimum tax rate.
  • The Commission is invited to present a legislative proposal to apply an EU-wide withholding tax to ensure that profits generated within the EU are taxed at least once before they leave its territory.
  • The Commission and the Members are called on to put in place a common, standardised withholding tax framework that reduces complexity for investors, curbs treaty shopping and ensures that all relevant dividends, interest, capital gains, royalty payments, professional service payments and contractual payments generated within the EU are taxed at an effective rate.
  • Members noted that the absence of an effective minimum tax rate on dividend payments to shareholders has created an environment that may encourage tax evasion. They called on the Commission to analyse this issue and assess the best legislative options to address it, including the possibility of revising the Parent-Subsidiary Directive.
  • Stepping up the fight against dividend arbitrage
  • Members pointed out that the cum-ex and cum-cum schemes both involve reclaims of dividend withholding tax to which the beneficiaries were not entitled and are estimated to have imposed a total cost to taxpayers of about EUR 140 billion between 2000 and 2020.
  • The report called on the Commission to assess possible solutions to tackle such schemes , in particular the possibility of linking tax reclaims to the underlying dividend distribution, including by means of a unique identifier and/or by making a single entity in each Member State responsible for collecting the withholding tax and issuing the corresponding tax certificate in order to ensure that multiple tax reclaims cannot be made for the same distribution and that tax administrations can easily detect any abuse of refund procedures.
  • The Commission is called on to:
  • - analyse whether the Market Abuse Regulation has been breached and consider whether it needs to be amended;
  • - propose measures to strengthen cooperation and mutual assistance between tax authorities, financial market supervisors and, where appropriate, law enforcement bodies in detecting and prosecuting withholding tax reclaim schemes;
  • - develop appropriate measures to prevent the role of intermediaries in facilitating tax abuse and tax evasion;
  • - extend the mandatory exchange of information to dividend arbitrage schemes and all information on capital gains, including the granting of dividend and capital gains tax refunds.
  • Removing barriers to cross-border investments in the single market
  • Members welcomed the Commission’s intention to present, by the end of 2022, a proposal establishing a common and standardised system for withholding taxes , accompanied by a mechanism for the exchange of information and cooperation among tax administrations of Member States. They urged the Commission, with full respect for EU competences, to strive also to tackle divergences in withholding taxes in the EU.
  • The Commission is called on to:
  • - come forward with a common and standardised EU procedure for withholding tax refunds for all Member States;
  • - introduce as part of this harmonisation, rules on exemptions and deductions and a standardised format and process for reclaim requests, and to address the current lack of a uniform definition of ‘beneficial owner’, the lack of alignment of time periods for request and reclaim, and language barriers;
  • - take account of existing digital solutions in Member States, to assess how to leverage blockchain technologies to prevent tax evasion and avoidance, while fully respecting EU data protection rules, and to consider the establishment of a pilot project.
  • Members welcomed the Commission’s proposed option to establish a fully fledged common EU relief-at-source system, which could be a reliable solution in the long term.
docs/2
date
2022-02-01T00:00:00
docs
url: https://www.europarl.europa.eu/doceo/document/A-9-2022-0011_EN.html title: A9-0011/2022
type
Committee report tabled for plenary, single reading
body
EP
events/2/docs
  • url: https://www.europarl.europa.eu/doceo/document/A-9-2022-0011_EN.html title: A9-0011/2022
events/2
date
2022-02-01T00:00:00
type
Committee report tabled for plenary
body
EP
procedure/stage_reached
Old
Awaiting committee decision
New
Awaiting Parliament's vote
events/1
date
2022-01-25T00:00:00
type
Vote in committee
body
EP
forecasts/0
date
2022-01-24T00:00:00
title
Vote scheduled in committee, 2nd reading
procedure/Other legal basis
Rules of Procedure EP 159
forecasts/0/title
Old
Vote scheduled in committee
New
Vote scheduled in committee, 2nd reading
forecasts/1
date
2022-03-07T00:00:00
title
Indicative plenary sitting date
forecasts
  • date: 2022-01-24T00:00:00 title: Vote scheduled in committee
docs/1/docs/0/url
https://www.europarl.europa.eu/doceo/document/ECON-AM-700464_EN.html
docs/1
date
2021-11-25T00:00:00
docs
title: PE700.464
type
Amendments tabled in committee
body
EP
docs
  • date: 2021-10-13T00:00:00 docs: url: https://www.europarl.europa.eu/doceo/document/ECON-PR-695241_EN.html title: PE695.241 type: Committee draft report body: EP
committees/0/shadows/2
name
URTASUN Ernest
group
Group of the Greens/European Free Alliance
abbr
Verts/ALE
committees/0/shadows/4
name
GUSMÃO José
group
The Left group in the European Parliament - GUE/NGL
abbr
GUE/NGL
committees/0/shadows
  • name: BENJUMEA BENJUMEA Isabel group: Group of European People's Party abbr: EPP
  • name: KELLEHER Billy group: Renew Europe group abbr: Renew
  • name: LAPORTE Hélène group: Identity and Democracy abbr: ID
  • name: MOŻDŻANOWSKA Andżelika Anna group: European Conservatives and Reformists Group abbr: ECR
commission
  • body: EC dg: Taxation and Customs Union commissioner: GENTILONI Paolo
events
  • date: 2021-07-08T00:00:00 type: Committee referral announced in Parliament body: EP
procedure/dossier_of_the_committee
  • ECON/9/06442
procedure/stage_reached
Old
Preparatory phase in Parliament
New
Awaiting committee decision