Progress:
Role | Committee | Rapporteur | Shadows |
---|---|---|---|
Lead | ECON | ||
Former Responsible Committee | ECON | DORFMANN Herbert ( EPP) |
Lead committee dossier:
Legal Basis:
TFEU 115
Legal Basis:
TFEU 115Events
The European Parliament adopted by 541 votes to 36, with 23 abstentions, following a special legislative procedure (consultation), a legislative resolution on the proposal for a Council directive on Faster and Safer Relief of Excess Withholding Taxes.
Parliament approved the Commission proposal subject to the following amendments:
Cum-ex and cum-cum schemes
Parliament stressed that the these 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 55 billion between 2001 and 2012 in the 11 Member States concerned. The cum-ex and cum-cum schemes have been ruled illegal and should be prosecuted according to national law. The tax administrations should be equipped with tools to deal with refund/relief at source procedures in a secure and timely manner and increase their efforts in providing digitalised, automated and better-coordinated key features.
Digital tax residence certificate (eTRC)
Members stated that Member States should issue the eTRC based on the available information within three working days from submission of a request. The eTRC should include information on the double tax treaty. If more than five working days are required to verify the tax residency of a specific taxpayer, the Member State should inform the person requesting the certificate of the additional time needed and the reasons for the delay that, in any case, should be no longer than five working days.
In any case, Member States may prove the residence for tax purposes in their jurisdictions. Member States should take the appropriate measures to require an individual or entity deemed resident in their jurisdiction for tax purposes to inform tax authorities issuing the eTRC about any change that could affect the validity or the content of the eTRC.
Certified financial intermediary
Member States should:
- ensure that a financial intermediary is registered in their national register of certified financial intermediaries within two months from submission of a request;
- inform all other Member States about rejections of registration as soon as possible;
- inform without undue delay all other Member States that maintain a national register of the rejection of a certified financial intermediary from their national register, stating the reasons for the rejection;
- update their national registers to reflect the status of financial intermediaries no longer holding certification;
- take the necessary measures to require certified financial intermediaries in their national register to report to the competent authority the information referred to in Annex II as soon as possible within a maximum of 20 calendar days after the record date;
- provide that certified financial intermediaries do not need to report information referred to in Annex II, heading E, if the total dividend paid to the registered owner on the owner’s shareholding in a company does not exceed EUR 1500;
- require certified financial intermediaries in their national register to keep the documentation supporting the information reported for six years .
Request for relief at source or quick refund
Member States should take the necessary measures to ensure that certified financial intermediaries requesting relief on behalf of a registered owner verify the risks of residence and citizenship by investment schemes that present a potentially high risk.
Quick refund system
Member States should process a refund request made in accordance with the directive within 25 calendar days from the date of such request. They should apply interest on the amount of such refund for each day of delay after the 25th day, unless the Member State has reasonable doubts on the legitimacy of the refund request.
Member States may reject a refund request if any verification procedure or tax audit, based on risk assessment criteria and according to the national legislation, is initiated.
Monitoring and exchange in information
To ensure the integrity of the internal market the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) should regularly monitor the risk for cum-cum and cum-ex in the Union.
Member States should introduce coordinated cooperation and mutual assistance between national competent authorities, tax authorities and other law enforcement bodies, such as the European Public Prosecutor’s Office (EPPO) to detect and prosecute illegal withholding tax reclaim schemes.
Evaluation
A report on the evaluation of the Directive and on the applicable rules to withholding taxes in the Member States, including on a potential need to amend specific provisions of this Directive, will be submitted to the European Parliament and the Council by December 2031 and every 5 years.
In the evaluation report, the Commission should:
- examine further possible measures to facilitate self-processed withholding tax claims for small investors who engage directly with tax authorities without the intermediation of certified financial intermediaries;
- assess how the procedures for withholding tax relief can be further simplified for retail investors ;
- examine whether a relief at source system could be envisaged as a procedure for all Member States ; and introduce further measures to facilitate such a system for small and medium-sized enterprises;
- examine whether Member States are still impacted by or prone to dividend arbitrage and dividend stripping schemes such as the cum-ex and cum-cum schemes and whether existing measures within the field of withholding taxes are sufficient to combat tax fraud, tax evasion and tax avoidance;
- consider further measures, if necessary, to ensure that all dividends, interest, capital gains, royalty payments, professional service payments and relevant contract payments generated in the Union are taxed at least once at an effective rate;
- examine the potential of distribution ledger systems or other technological tools to render the system more efficient and fraud proof through better identification of the beneficial owner;
- examine possible measures to digitalise relief and refund processes, and claims;
- assess the acceptance of electronic or digital signatures and use of e-ID to facilitate the verification process for individual investors.
Where appropriate, the evaluation report should be accompanied by a legislative proposal.
The Committee on Economic and Monetary Affairs adopted, following a special legislative procedure (consultation), the report by Herbert DORFMANN (EPP, IT) on the proposal for a Council directive on Faster and Safer Relief of Excess Withholding Taxes.
The committee responsible approved the Commission proposal subject to the following amendments:
Digital tax residence certificate (eTRC)
Member States should provide for an automated process to issue digital tax residence certificates (eTRC) to a person deemed resident in their jurisdiction for tax purposes. Members stated that Member States should issue the eTRC based on the available information within three working days from submission of a request. The eTRC should include information on the double tax treaty.
If more than five working days are required to verify the tax residency of a specific taxpayer, the Member State should inform the person requesting the certificate of the additional time needed and the reasons for the delay that, in any case, should be no longer than five working days .
Certified financial intermediary
Member States should:
- ensure that a financial intermediary is registered in their national register of certified financial intermediaries within two months from submission of a request;
- inform all other Member States about rejections of registration as soon as possible;
- update their national registers to reflect the status of financial intermediaries no longer holding certification;
- take the necessary measures to require certified financial intermediaries in their national register to report to the competent authority the information referred to in Annex II as soon as possible within a maximum of 20 calendar days after the record date;
- provide that certified financial intermediaries do not need to report information referred to in Annex II, heading E, if the total dividend paid to the registered owner on the owner’s shareholding in a company does not exceed EUR 1500 ;
- require certified financial intermediaries in their national register to keep the documentation supporting the information reported for six years.
Request for relief at source or quick refund
Member States should take the necessary measures to ensure that certified financial intermediaries requesting relief on behalf of a registered owner verify the risks of residence and citizenship by investment schemes that present a potentially high risk.
Quick refund system
Member States should process a refund request made in accordance with the directive within 25 calendar days from the date of such request. They should apply interest on the amount of such refund for each day of delay after the 25th day, unless the Member State has reasonable doubts on the legitimacy of the refund request.
Member States may reject a refund request if any verification procedure or tax audit, based on risk assessment criteria and according to the national legislation, is initiated.
Monitoring and exchange in information
To ensure the integrity of the internal market the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) should regularly monitor the risk for cum-cum and cum-ex in the Union.
Member States should introduce coordinated cooperation and mutual assistance between national competent authorities, tax authorities and other law enforcement bodies, such as the European Public Prosecutor’s Office (EPPO) to detect and prosecute illegal withholding tax reclaim schemes .
Evaluation
The Commission should examine and evaluate the functioning of this Directive, after national rules transposing the Directive come into effect, every five years. A report on the evaluation of the Directive and on the applicable rules to withholding taxes in the Member States, including on a potential need to amend specific provisions of this Directive, will be submitted to the European Parliament and the Council by December 2031 and every 5 years.
In the evaluation report, the Commission should:
- examine further possible measures to facilitate self-processed withholding tax claims for small investors who engage directly with tax authorities without the intermediation of certified financial intermediaries;
- assess how the procedures for withholding tax relief can be further simplified for retail investors ;
- conduct a comprehensive analysis of the development of the service fees financial intermediaries charge registered owners for the implementation of the quick refund procedure and the relief at source procedure;
- examine whether a relief at source system could be envisaged as a procedure for all Member States ; and introduce further measures to facilitate such a system for small and medium-sized enterprises;
- examine whether Member States are still impacted by or prone to dividend arbitrage and dividend stripping schemes such as the cum-ex and cum-cum schemes and whether existing measures within the field of withholding taxes are sufficient to combat tax fraud, tax evasion and tax avoidance;
- consider further measures, if necessary, to ensure that all dividends, interest, capital gains, royalty payments, professional service payments and relevant contract payments generated in the Union are taxed at least once at an effective rate;
- examine the potential of distribution ledger systems or other technological tools to render the system more efficient and fraud proof through better identification of the beneficial owner;
- examine possible measures to digitalise relief and refund processes, and claims;
- assess the acceptance of electronic or digital signatures and use of e-ID to facilitate the verification process for individual investors.
Where appropriate, the evaluation report should be accompanied by a legislative proposal.
PURPOSE: to make withholding tax procedures in the EU more efficient and secure for investors, financial intermediaries and Member State tax administrations.
PROPOSED ACT: Council Directive.
ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion.
BACKGROUND: ensuring fair taxation in the internal market and the good functioning of the Capital Markets Union (CMU) are political priorities for the European Union (EU). In this context, removing obstacles to cross-border investment, while combating tax fraud and abuse is critical.
In the EU, investors may be generally obliged to pay tax twice on the income they receive from holding securities (namely dividends on holdings of equities and interest on holdings of bonds) in a cross-border context.
First, taxes may be levied in the country of the issuer of the securities (the source country) in the form of a tax withheld from the gross securities income, (withholding tax (WHT)). Secondly, taxes may be levied in the investor’s country of residence (the residence country) in the form of income tax.
To avoid double taxation, many EU Member States have signed double taxation treaties , which avoid the same individual or company being taxed twice. These treaties allow a cross-border investor to submit a refund claim for any excess tax paid in another Member State.
The problem is that these refund procedures are often lengthy, costly and cumbersome, causing frustration for investors and discouraging cross-border investment within and into the EU. Currently, the withholding tax procedures applied in each Member State are very different. Some Member States have experienced large-scale tax abuse schemes known as ‘Cum/Ex’ and ‘Cum/Cum’ . ‘Cum/Ex’ schemes work as fraudulent multiple reclaim schemes when entitled to a single reclaim.
In order to strengthen Member States’ ability to prevent and fight against potential fraud or abuse, it is necessary to put in place a common framework for the relief of excess withholding taxes on cross-border investments in securities that is resilient to a risk of tax fraud or abuse.
CONTENT: the aim of this Commission proposal is to make EU withholding tax procedures more efficient, while strengthening them against the risk of tax fraud and abuse.
In particular, the proposal lays down rules on the issuance of a digital tax residence certificate by Member States and the procedure to relieve any excess withholding tax that can be withheld by a Member State on dividends from publicly traded shares and, where applicable, interest from publicly traded bonds paid to registered owners who are resident for tax purposes outside that Member State.
The following actions intend to make life easier for investors, financial intermediaries and national tax authorities:
A common EU digital tax residence certificate (eTRC) will be introduced by all Member States and will make withholding tax relief procedures faster and more efficient. For example, investors with a diversified portfolio in the EU will need only one digital tax residence certificate to reclaim several refunds during the same calendar year. The digital tax residence certificate should be issued within one working day after the submission of a request. At present, most Member States still rely on paper-based procedures.
Two fast-track procedures complementing the existing standard refund procedure: a ‘relief at source’ procedure and a ‘quick refund’ system, which will make the relief process faster and more harmonised across the EU. Member States will be able to choose which one to use – including a combination of both.
- under the ‘relief at source’ procedure, the tax rate applied at the time of payment of dividends or interest is directly based on the applicable rules of the double taxation treaty provisions;
- under the ‘quick refund’ procedure, the initial payment is made taking into account the withholding tax rate of the Member State where the dividends or interest is paid, but the refund for any overpaid taxes is granted within 50 days from the date of payment.
These standardised procedures are estimated to save investors around EUR 5.17 billion per year.
A standardised reporting obligation will provide national tax administrations with the necessary tools to check eligibility for the reduced rate and to detect potential abuse. Certified financial intermediaries will have to report the payment of dividends or interest to the relevant tax administration so that the latter can trace the transaction. In particular, large EU financial intermediaries will be required to join a national register of certified financial intermediaries. This register will also be open to non-EU and smaller EU financial intermediaries on a voluntary basis.
Taxpayers investing in the EU through certified financial intermediaries will benefit from fast-track withholding tax procedures and avoid double taxation on dividend payments. The more financial intermediaries register, the easier it will be for tax authorities to process refund requests, regardless of the procedure used.
Budgetary implications
The main budgetary implications of the initiative for the Commission include implementing the electronic tax residence certificate and establishing the formats and communication channels to be used by financial intermediaries to report to the national tax authorities.
Documents
- Amended legislative proposal for reconsultation: 09925/2024
- Amended legislative proposal for reconsultation published: 09925/2024
- Results of vote in Parliament: Results of vote in Parliament
- Decision by Parliament: T9-0102/2024
- Committee report tabled for plenary, 1st reading/single reading: A9-0007/2024
- Economic and Social Committee: opinion, report: CES3253/2023
- Amendments tabled in committee: PE756.226
- Amendments tabled in committee: PE756.221
- Document attached to the procedure: OJ C 000 13.11.2023, p. 0000
- Document attached to the procedure: N9-0081/2023
- Contribution: COM(2023)0324
- Contribution: COM(2023)0324
- Committee draft report: PE752.746
- Document attached to the procedure: SEC(2023)0243
- Document attached to the procedure: EUR-Lex
- Document attached to the procedure: SWD(2023)0215
- Document attached to the procedure: EUR-Lex
- Document attached to the procedure: SWD(2023)0216
- Document attached to the procedure: EUR-Lex
- Document attached to the procedure: SWD(2023)0217
- Legislative proposal published: COM(2023)0324
- Legislative proposal published: EUR-Lex
- Document attached to the procedure: SEC(2023)0243
- Document attached to the procedure: EUR-Lex SWD(2023)0215
- Document attached to the procedure: EUR-Lex SWD(2023)0216
- Document attached to the procedure: EUR-Lex SWD(2023)0217
- Committee draft report: PE752.746
- Document attached to the procedure: OJ C 000 13.11.2023, p. 0000 N9-0081/2023
- Amendments tabled in committee: PE756.221
- Amendments tabled in committee: PE756.226
- Economic and Social Committee: opinion, report: CES3253/2023
- Amended legislative proposal for reconsultation: 09925/2024
- Contribution: COM(2023)0324
- Contribution: COM(2023)0324
Activities
- Roberta METSOLA
Plenary Speeches (1)
- Marc BOTENGA
Plenary Speeches (1)
Votes
A9-0007/2024 – Herbert Dorfmann – After Article 17 – Am 63/1 #
A9-0007/2024 – Herbert Dorfmann – After Article 17 – Am 64 #
FR | ES | PT | DE | EL | DK | ?? | CY | LU | SI | AT | HR | LT | EE | FI | LV | MT | IE | BE | SK | BG | NL | CZ | SE | HU | IT | RO | PL | ||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Total |
66
|
51
|
18
|
88
|
13
|
13
|
1
|
5
|
6
|
8
|
18
|
12
|
11
|
7
|
14
|
6
|
5
|
12
|
19
|
12
|
15
|
27
|
21
|
21
|
15
|
59
|
26
|
44
|
|
S&D |
127
|
France S&DFor (7) |
Spain S&DFor (18)Alicia HOMS GINEL, Cristina MAESTRE, César LUENA, Domènec RUIZ DEVESA, Eider GARDIAZABAL RUBIAL, Estrella DURÁ FERRANDIS, Ibán GARCÍA DEL BLANCO, Inma RODRÍGUEZ-PIÑERO, Isabel GARCÍA MUÑOZ, Javi LÓPEZ, Jonás FERNÁNDEZ, Juan Fernando LÓPEZ AGUILAR, Laura BALLARÍN CEREZA, Lina GÁLVEZ, Marcos ROS SEMPERE, Mónica Silvana GONZÁLEZ, Nacho SÁNCHEZ AMOR, Nicolás GONZÁLEZ CASARES
Abstain (1) |
Portugal S&DFor (8)Against (1) |
Germany S&DFor (14) |
1
|
3
|
1
|
2
|
1
|
2
|
5
|
4
|
2
|
2
|
2
|
1
|
4
|
1
|
1
|
3
|
Netherlands S&DFor (4)Abstain (2) |
1
|
5
|
4
|
Italy S&DFor (10)Abstain (4) |
Romania S&DFor (4)Against (3) |
Poland S&DFor (6) |
|
Verts/ALE |
69
|
France Verts/ALEFor (11) |
3
|
1
|
Germany Verts/ALEFor (23)Alexandra GEESE, Anna CAVAZZINI, Anna DEPARNAY-GRUNENBERG, Daniel FREUND, Erik MARQUARDT, Hannah NEUMANN, Henrike HAHN, Jutta PAULUS, Katrin LANGENSIEPEN, Malte GALLÉE, Manuela RIPA, Martin HÄUSLING, Michael BLOSS, Nico SEMSROTT, Patrick BREYER, Pierrette HERZBERGER-FOFANA, Rasmus ANDRESEN, Reinhard BÜTIKOFER, Romeo FRANZ, Sergey LAGODINSKY, Ska KELLER, Terry REINTKE, Viola VON CRAMON-TAUBADEL
Abstain (1) |
1
|
2
|
1
|
3
|
2
|
3
|
2
|
3
|
3
|
3
|
3
|
3
|
1
|
|||||||||||
The Left |
29
|
France The LeftFor (6) |
4
|
2
|
4
|
2
|
1
|
2
|
1
|
3
|
1
|
1
|
1
|
1
|
|||||||||||||||
NI |
38
|
3
|
2
|
3
|
Greece NIFor (2)Abstain (2) |
2
|
1
|
1
|
1
|
2
|
1
|
1
|
Hungary NIAgainst (9) |
Italy NIFor (6)Against (1) |
1
|
||||||||||||||
ID |
46
|
France IDFor (11)Against (1) |
Germany IDAgainst (8) |
1
|
3
|
1
|
3
|
1
|
Italy IDAgainst (17) |
||||||||||||||||||||
ECR |
56
|
1
|
Spain ECRAgainst (1)Abstain (3) |
1
|
1
|
1
|
2
|
1
|
3
|
1
|
2
|
3
|
4
|
3
|
Italy ECRAgainst (6) |
1
|
Poland ECRAgainst (22)
Adam BIELAN,
Andżelika Anna MOŻDŻANOWSKA,
Anna FOTYGA,
Anna ZALEWSKA,
Beata KEMPA,
Beata MAZUREK,
Bogdan RZOŃCA,
Dominik TARCZYŃSKI,
Elżbieta KRUK,
Elżbieta RAFALSKA,
Grzegorz TOBISZOWSKI,
Izabela-Helena KLOC,
Jacek SARYUSZ-WOLSKI,
Jadwiga WIŚNIEWSKA,
Joanna KOPCIŃSKA,
Kosma ZŁOTOWSKI,
Patryk JAKI,
Rafał ROMANOWSKI,
Ryszard Antoni LEGUTKO,
Ryszard CZARNECKI,
Witold Jan WASZCZYKOWSKI,
Zdzisław KRASNODĘBSKI
|
||||||||||||
Renew |
95
|
France RenewAgainst (19)
Bernard GUETTA,
Catherine AMALRIC,
Catherine CHABAUD,
Christophe GRUDLER,
Dominique RIQUET,
Fabienne KELLER,
Gilles BOYER,
Guy LAVOCAT,
Jérémy DECERLE,
Laurence FARRENG,
Marie-Pierre VEDRENNE,
Nathalie LOISEAU,
Pascal CANFIN,
Pierre KARLESKIND,
Salima YENBOU,
Sandro GOZI,
Stéphanie YON-COURTIN,
Sylvie BRUNET,
Valérie HAYER
|
Germany RenewAgainst (7) |
1
|
Denmark RenewFor (1)Against (4) |
2
|
2
|
1
|
1
|
1
|
3
|
3
|
1
|
2
|
4
|
4
|
3
|
Netherlands RenewAgainst (7) |
Czechia RenewAgainst (5) |
3
|
2
|
4
|
Romania RenewAgainst (6) |
1
|
|||||
PPE |
153
|
France PPEAgainst (7) |
Portugal PPEAgainst (6) |
Germany PPEFor (1)Against (26)
Andreas SCHWAB,
Angelika NIEBLER,
Axel VOSS,
Christian DOLESCHAL,
Christine SCHNEIDER,
Daniel CASPARY,
David MCALLISTER,
Dennis RADTKE,
Hildegard BENTELE,
Jens GIESEKE,
Karolin BRAUNSBERGER-REINHOLD,
Manfred WEBER,
Marion WALSMANN,
Markus FERBER,
Markus PIEPER,
Marlene MORTLER,
Monika HOHLMEIER,
Niclas HERBST,
Niels GEUKING,
Norbert LINS,
Peter JAHR,
Peter LIESE,
Ralf SEEKATZ,
Sabine VERHEYEN,
Stefan BERGER,
Sven SIMON
|
Greece PPEAgainst (4) |
1
|
1
|
2
|
4
|
Austria PPEAgainst (6) |
4
|
4
|
1
|
3
|
2
|
1
|
5
|
3
|
4
|
Bulgaria PPEAgainst (7) |
Netherlands PPEAgainst (6) |
Czechia PPEAgainst (5) |
Sweden PPEAgainst (6) |
Italy PPEAgainst (8) |
Romania PPEAgainst (11) |
A9-0007/2024 – Herbert Dorfmann – After Article 17 – Am 65 #
A9-0007/2024 – Herbert Dorfmann – After Article 17 – Am 66 #
A9-0007/2024 – Herbert Dorfmann – Commission proposal #
Amendments | Dossier |
142 |
2023/0187(CNS)
2023/11/17
ECON
136 amendments...
Amendment 100 #
Proposal for a directive Article 11 – paragraph 1 – introductory part 1. Member States shall take the necessary measures to ensure that the certified financial intermediary requesting relief under Article 12 and/or 13 on behalf of a registered owner obtains from such registered owner a declaration that the registered owner:
Amendment 101 #
Proposal for a directive Article 11 – paragraph 1 – point a (a) is the beneficial owner of the dividend or interest as defined under the national legislation of the source Member State or a double tax treaty; and
Amendment 102 #
Proposal for a directive Article 11 – paragraph 2 – introductory part 2. Member States shall take the necessary measures to ensure certified financial intermediaries requesting relief under Article 12 and/or 13 on behalf of a registered owner to verify:
Amendment 103 #
Proposal for a directive Article 11 – paragraph 2 – point a a (new) (a a) the risks associated with the misuse by the registered owners of an eTRC issued by Member States or third countries which offer residence and citizenship by investment schemes;
Amendment 104 #
Proposal for a directive Article 11 – paragraph 2 – point a a (new) (a a) the risks associated with the misuse by the registered owners of an eTRC issued by Member States or third countries which offer residence and citizenship by investment schemes;
Amendment 105 #
Proposal for a directive Article 11 – paragraph 2 – point d (d) in case of a dividend payment and based on the information available to the certified financial intermediary, the possible existence of any financial arrangement that has not been settled, expired or otherwise terminated at the ex- dividend date
Amendment 106 #
Proposal for a directive Article 11 – paragraph 2 – point d (d) in case of a dividend payment and based on the information available to the certified financial intermediary, the possible existence of any financial arrangement that has not been settled, expired or otherwise terminated at the ex- dividend date, unless the dividend paid to the registered owner for each group of identical shares held does not exceed EUR
Amendment 107 #
Proposal for a directive Article 11 – paragraph 2 a (new) 2 a. Member States may allow to obtain the declaration according to paragraph 1 and to carry out the verifications according to paragraph 2 on an annual basis.
Amendment 108 #
Proposal for a directive Article 11 – paragraph 3 a (new) 3 a. By [2 years from the date of entry into force of this Directive], the Commission shall adopt recommendations for the fulfilment of the requirements laid down in paragraph 2.
Amendment 109 #
Proposal for a directive Article 12 Amendment 110 #
Proposal for a directive Article 13 – paragraph 1 1. Member States may allow certified financial intermediaries maintaining a registered owner’s investment account to request a quick refund of the excess withholding tax, on behalf of such registered owner in accordance with Article 10 if the information referred to in paragraph 3 of this Article is provided
Amendment 111 #
Proposal for a directive Article 13 – paragraph 1 1. Member States may allow certified financial intermediaries maintaining a registered owner’s investment account to request a quick refund of the excess withholding tax, on behalf of such registered owner in accordance with Article 10 if the information referred to in paragraph 3 of this Article is provided as soon as possible after the payment date and at the latest within 2
Amendment 112 #
Proposal for a directive Article 13 – paragraph 1 1. Member States may allow certified financial intermediaries maintaining a registered owner’s investment account to request a quick refund of the excess withholding tax, on behalf of such registered owner in accordance with Article 10 if the information referred to in paragraph 3 of this Article is provided as soon as possible after the payment date and at the latest within 25 calendar days from the date of payment of the dividend
Amendment 113 #
Proposal for a directive Article 13 – paragraph 2 2. Member States shall process a refund request made in accordance with paragraph 1 within
Amendment 114 #
Proposal for a directive Article 13 – paragraph 2 2. Member States shall process a refund request made in accordance with paragraph 1 within 2
Amendment 115 #
Proposal for a directive Article 13 – paragraph 2 2. Member States shall process a refund request made in accordance with paragraph 1 within 25 calendar days from the date of such request or from the date reporting obligations under this Directive have been met by all relevant certified financial intermediaries, whichever is the latest. Member States shall apply interest in accordance with Article 14 on the amount of such refund for each day of delay after the 25th day, unless the Member State has reasonable doubts on the legitimacy of the refund request.
Amendment 116 #
Proposal for a directive Article 13 – paragraph 3 – point c (c) the tax residence of the registered owner and a substancial proof of that it is the benefical owner;
Amendment 117 #
(d a) any other information that is deemed relevant by the Member State to fight potential fraud.
Amendment 118 #
Proposal for a directive Article 13 – paragraph 3 a (new) 3 a. Member States may reject a refund request if any verification procedure or tax audit, based on risk assessment criteria and according to the national legislation, is iniatiated.
Amendment 119 #
Proposal for a directive Article 14 – paragraph 1 Member States shall, where national legislation includes such provisions, apply interest in accordance with Article 13(2) at a rate equal to the interest or equivalent charge applied by the Member State to late payments
Amendment 120 #
Proposal for a directive Article 15 – paragraph 1 Member States shall adopt appropriate measures to ensure that where Article
Amendment 121 #
Proposal for a directive Article 15 – paragraph 1 Member States shall adopt appropriate measures to ensure that where Article 12 and Article 13 do not apply to dividends, because the conditions of this Directive are not met, a registered owner or its authorised representative requesting for refund of the excess withholding tax on such dividends provides at least the information required under Annex II,
Amendment 122 #
Proposal for a directive Article 16 – paragraph 1 1. Member States shall take appropriate measures to ensure that if a certified financial intermediary does not comply, intentionally or negligently, with its obligations under Articles 9, 10, 11
Amendment 123 #
Proposal for a directive Article 17 – paragraph 1 1. Member States shall lay down the rules on penalties applicable to infringements of national provisions adopted pursuant to this Directive, and shall take all measures necessary to ensure that they are implemented. These penalties shall be effective, proportionate and
Amendment 124 #
Proposal for a directive Article 17 a (new) Article17a Minimum effective tax rate The Commission shall by 2026 put forward a legislative proposal to design a framework that ensures a minimum effective tax rate of 30% for intra-EU flows of dividendes, royalties and interests. This framework should incentives Member states to take appropriate measures to ensure this minimum effective tax rate.
Amendment 125 #
Proposal for a directive Article 17 b (new) Article17b Revision of IRD and PSD 1. The Commission shall present a revision of the Interest and Royalties Directive in order to guarantee a minimum effective tax rate and implement strong anti-abuse rules. 2. The Commission shall present a revision of the Parent-Subsidiary Directive in order to guarantee a minimum effective tax rate and implement strong anti-abuse rules.
Amendment 126 #
Proposal for a directive Article 17 c (new) Article17c Public financial asset registry The Commission shall by 2026 put forward a legislative proposal to design a global public asset registry at the European Union level. The objective of the registry would be to record the ownership financial assets. Such a registry will be key to achieve the goals of this Directive but also to set up the minimum tax refeared in 17a.
Amendment 127 #
Proposal for a directive Article 18 a (new) Article 18a Monitoring and exchange in information 1. To ensure the integrety of the internal market the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) shall regularly monotor the risk for cum-cum, cum-ex and similar schemes in the EU. 2. Member States shall introduce enhanced cooperation and mutual assistance between national competent authorities, tax authorities and other law enforcement bodies, such as the European Public Prosecutor’s Office (EPPO) to detect and prosecute withholding tax reclaim schemes.
Amendment 128 #
Proposal for a directive Article 18 b (new) Article 18b Evaluation of fraudulent schemes 1. A year after transposition of the Directive, the Commission shall submit a report to the European Parliament and the Council assessing whether Member States are still impacted by or prone to dividend arbitrage and dividend stripping schemes such as the Cum/Ex and Cum/Cum schemes. Such report shall be submitted every 2 years thereafter. 2. Member States shall communicate to the Commission relevant information for the purpose of paragraph 1. 3. For the purpose of paragraph 2, Member States shall consult the EBA, the ESMA, the EPPO and relevant national competent authorities. 4. If deemed necessary, the Commission shall present a legislative proposal to further clamp down on dividend arbitrage and dividend stripping schemes. The Commission shall consider introducing a common withholding tax in the EU or a proposal to tax capital gains upon disposal of shares and security lending fees equivalent to dividends.
Amendment 131 #
Proposal for a directive Article 19 – paragraph 1 1. The Commission shall examine and evaluate the functioning of this Directive, after national rules transposing the Directive come into effect, every 5 years. A report on the evaluation of the Directive and on the applicable rules to withholding taxes in the EU, including on a potential need to amend specific provisions
Amendment 132 #
Proposal for a directive Article 19 – paragraph 1 1. The Commission shall examine and
Amendment 133 #
Proposal for a directive Article 19 – paragraph 1 a (new) 1 a. In the evaluation report, the Commission shall: (a) examine whether Chapter III should be mandatory applied to all Member States; (b) examine whether the relief at source system should be applied in all Member States, and introduce further measures to facilite such a system for SMEs.
Amendment 134 #
Proposal for a directive Article 19 – paragraph 1 a (new) 1 a. The report referred to in paragraph 1 shall, if applicable, be accompanied by a legislative proposal, and include an assessment on the following:
Amendment 135 #
Proposal for a directive Article 19 – paragraph 1 b (new) 1 b. a) the establishment of a common and standardised withholding tax framework in the EU that reduces complexity for investors, stems the practice of treaty shopping and ensures that all dividends, interest, capital gains, royalty payments, professional service payments and relevant contract payments generated in the EU are taxed at a minimum effective tax rate;
Amendment 136 #
Proposal for a directive Article 19 – paragraph 1 c (new) 1 c. b) an EU-wide withholding border tax to ensure that all payments generated within the Union are taxed at least once before leaving it;
Amendment 137 #
Proposal for a directive Article 19 – paragraph 1 d (new) 1 d. c) the enhancement of coordinated defensive measures against countries listed as non-cooperative jurisdictions for tax purposes, including withholding taxation, given the discretionary application by individual Member States of defensive measures;
Amendment 138 #
Proposal for a directive Article 19 – paragraph 1 e (new) 1 e. d) further measures required at EU level within the field of withholding taxes to combat tax fraud, tax evasion and tax avoidance, including subjecting capital gains upon disposal of shares and security lending fees to taxation equivalent to dividend to deter and mitigate dividend arbitrage;
Amendment 139 #
Proposal for a directive Article 19 – paragraph 1 f (new) 1 f. e) The implementation of a relief at source system as the default procedural option applicable to all Member States;
Amendment 140 #
Proposal for a directive Article 19 – paragraph 2 2. Member States shall communicate to the Commission relevant information for the evaluation of
Amendment 141 #
Proposal for a directive Article 19 – paragraph 2 2. Member States shall communicate to the Commission relevant information for the evaluation of the Directive in estimations of tax revenue losses, improving withholding tax relief procedures to
Amendment 142 #
Proposal for a directive Article 19 – paragraph 2 2. Member States shall communicate to the Commission relevant statistical information for the evaluation of the Directive in improving withholding tax relief procedures to reduce double taxation as well as combat tax abuse, in accordance with paragraph 3.
Amendment 143 #
Proposal for a directive Article 19 – paragraph 2 a (new) 2 a. Member States shall actively assess whether the Directive has an impact on risks for tax fraud and abuse, and the impact on tax revenues.
Amendment 144 #
Proposal for a directive Article 19 – paragraph 3 3. The Commission shall, by means of implementing acts, specify the statistical information to be provided by Member States for the purposes of evaluation and the format and the conditions of communication of that information.
Amendment 145 #
Proposal for a directive Article 19 – paragraph 5 5. Information communicated to the Commission by a Member State under paragraph 2, as well as any report or document produced by the Commission using such information, may be transmitted to other Member States and the European Parliament. The transmitted information shall be covered by the obligation of official secrecy and enjoy the protection extended to similar information under the national law of the Member State which received it.
Amendment 146 #
Proposal for a directive Article 19 a (new) Amendment 147 #
Proposal for a directive Article 20 – paragraph 1 1. Member States shall restrict data subject’s rights under Articles 15 to 19 of Regulation (EU) 2016/679 of the European Parliament and of the Council45 only to the extent and only as long as it is strictly necessary for their competent authorities to mitigate the risk of tax fraud, evasion or avoidance in Member States, in particular by verifying that the correct withholding tax rate is applied for the registered owner, or by verifying that the registered owner obtains the relief if so entitled in a timely manner. The rights of the data subjects shall be restored as soon as the conditions that supported the restriction cease to exist. _________________ 45 Regulation (EU) 2016/679 of the
Amendment 148 #
Proposal for a directive Article 20 – paragraph 3 3. Information, including personal data, processed in accordance with this Directive shall be retained
Amendment 149 #
Proposal for a directive Article 20 – paragraph 3 3. Information, including personal data, processed in accordance with this Directive shall be retained only as long as strictly necessary to achieve the purposes of this Directive, in accordance with each data controller’s domestic rules on statute of limitations, but in any case no longer than
Amendment 150 #
Proposal for a directive Article 22 – paragraph 1 – subparagraph 1 Member States shall adopt and publish, by 31 December 202
Amendment 151 #
Proposal for a directive Article 22 – paragraph 1 – subparagraph 1 Member States shall adopt and publish, by 31 December 202
Amendment 152 #
Proposal for a directive Article 22 – paragraph 1 – subparagraph 2 They shall apply those provisions from 1 January 202
Amendment 153 #
Proposal for a directive Article 22 – paragraph 1 – subparagraph 2 They shall apply those provisions from 1 January 202
Amendment 18 #
Proposal for a directive Recital 1 (1)
Amendment 19 #
Proposal for a directive Recital 1 (1) Ensuring fair taxation in the internal market and the good functioning of the Capital Markets Union (CMU) are political priorities for the European Union (EU). In this context, removing obstacles to cross-border investment, while combating tax fraud and abuse is critical. Such obstacles exist, for example, through inefficient and disproportionately burdensome procedures to relieve excess taxes withheld at source on dividend or interest income paid on shares or bonds traded publicly to non-resident investors. Such obstacles pose a particular challenge for retail investors. In addition, the status quo has proven inadequate in preventing recurring risks of tax fraud, evasion and avoidance, as shown by the recent Cum/Ex and Cum/Cum scandals. This proposal seeks to make EU withholding tax procedures more efficient, while strengthening them against the risk of tax fraud and abuse. It draws on relevant previous actions at EU and international level, such as the 2009 Commission Recommendation on the simplification of withholding tax procedures and the OECD’s Treaty Relief and Compliance Enhancement (TRACE) initiative28 . _________________ 28 Commission Recommendation of 19
Amendment 20 #
Proposal for a directive Recital 1 a (new) (1 a) 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 55 billion between 2001 and 2012 in the 11 Member States concerned; revelations in 2021 concerning these practices estimate that they have cost 10 EU governments, including those of Germany, Spain, France and the US, a total of €141bn;
Amendment 21 #
Proposal for a directive Recital 1 b (new) (1 b) the financial sector has demonstrated inadequacy in upholding its responsibility as intermediaries between clients and national tax administrations, notably by assisting clients in securing tax refunds for amounts not genuinely paid, thereby defrauding EU member states of billions of euros.
Amendment 22 #
Proposal for a directive Recital 2 Amendment 23 #
Proposal for a directive Recital 2 a (new) (2 a) To fight fraud, Member States’ Eurofisc liaison officials and the EPPO, OLAF and Europol should be able to access and analyse all needed information on withholding tax relief or refund procedures. Notes that the cum-ex and cum-cum schemes both involve reclaims of dividend withholding tax, facilitated by the financial sector and other intermediairies, to which the beneficiaries were not entitled and are estimated to have imposed a total cost to public coffers of around EUR 140 billion between 2000 and 2020 in the EU. Is afraid such schemes and similar schemes are still being deployed in Member States. Notes the progress made in certain Member States to fight such fraudulent schemes.
Amendment 24 #
Proposal for a directive Recital 2 a (new) Amendment 25 #
Proposal for a directive Recital 2 b (new) (2 b) The cum-ex and cum-cum schemes have been ruled illegal and should constitute serious criminal offenses.
Amendment 26 #
Proposal for a directive Recital 2 c (new) (2 c) Underlines Member States should strive to agree on a common withholding tax rate in the EU.
Amendment 27 #
Proposal for a directive Recital 2 d (new) (2 d) To ensure the integrety of the internal market the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) should regularly monotor the risk for cum-cum, cum-ex and similar schemes in the EU and enhanced cooperation and mutual assistance between national competent authorities, tax authorities and other law enforcement bodies should help to detect and prosecute withholding tax reclaim schemes.
Amendment 28 #
Proposal for a directive Recital 3 (3)
Amendment 29 #
Proposal for a directive Recital 4 (4) To ensure that all EU taxpayers have access to a common, appropriate and effective proof of their residence for tax purposes, Member States should use automated procedures for the issuance of tax residence certificates in the same recognisable and acceptable digital form and with the same content. To allow for greater efficiency, the certificate should be valid at least for the whole year during which it has been issued and recognised by other Member States for that period. The eTRC should also contain a reference to applicable double taxation agreements. Member States can rescind an eTRC issued where the tax administration has proof to the contrary of the tax residence for that year. In order to allow for an efficient identification of EU companies, the certificate should include information on the European Unique Identifier (EUID).
Amendment 30 #
Proposal for a directive Recital 5 (5) To fulfil the objective of more efficient re
Amendment 31 #
Proposal for a directive Recital 6 (6)
Amendment 32 #
Proposal for a directive Recital 6 (6) As the financial intermediaries most often engaged in the securities’ payment chains are large institutions as defined in the Capital Requirements Regulation (CRR)29 as well as central securities depositories providing withholding tax agent services, these entities should be obliged to request registration on the national registers of Member States established as above. Other financial intermediaries should be allowed to request registration at their discretion. Registration should be requested by the financial intermediary itself by submitting an application to the competent authority designated by the Member State, including evidence that the financial intermediary meets certain requirements. The purpose of the requirements is to verify that the requesting intermediary meets the requirements of relevant EU regulation and supervised for compliance therewith. Where the financial intermediary is established outside the EU, it is required to be subject to legislation in the third country of its residence that is comparable for the purposes of this Directive and the third country of residence is neither on Annex I of the EU list of non-cooperative jurisdictions nor on the EU list of high-risk third countries (anti-money laundering list). Compliance of a third country financial intermediary with the relevant EU requirements relates solely for the purposes set out in this Directive and has no impact on the exercising or application of any other rights and obligations under other EU legislation. Once registered, financial intermediaries should be considered “certified financial intermediaries” in the respective Member State and be subject to the relevant reporting and notification obligations under this Directive while granted the right to request application of the relief procedures set out in this Directive. The Member States that maintain a national register should also take action to remove therefrom any
Amendment 33 #
Proposal for a directive Recital 7 (7) To ensure greater transparency on the identity and the circumstances of the investor receiving a dividend or interest payment as well as on the flow of the payment from the issuer, certified financial intermediaries should report to the authority designated to maintain the
Amendment 34 #
Proposal for a directive Recital 8 Amendment 35 #
Proposal for a directive Recital 8 (8) In order to render the Capital Markets Union more effective and competitive, procedures for relief of excess withholding taxes on securities’ income should be facilitated and accelerated, where adequate information has been provided by relevant certified financial intermediaries, including on the identity of the investor. The relevant certified financial intermediaries consist of all the certified financial intermediaries in the payment chain between the investor and the issuer of the securities, which might be required to also provide information on payments effected by non-certified financial intermediaries in the chain, as per the policy choice of each Member State. Taking into account the different approaches in Member States, two types of procedures are envisaged: (i) relief at source by direct application of the appropriate tax rate at the time of withholding and (ii) quick refund within a
Amendment 36 #
Proposal for a directive Recital 8 (8) In order to render the Capital Markets Union more effective and competitive, procedures for relief of excess withholding taxes on securities’ income should be facilitated and accelerated, where adequate information has been provided by relevant certified financial intermediaries, including on the identity of the investor. The relevant certified financial intermediaries consist of all the certified financial intermediaries in the payment chain between the investor and the issuer of the securities, which might be required to also provide information on payments effected by non-certified financial intermediaries in the chain, as per the policy choice of each Member State. Taking into account the different approaches in Member States, two types of procedures are envisaged: (i) relief at source by direct application of the appropriate tax rate at the time of withholding and (ii) quick refund within a maximum of
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