One month earlier, the Council of the EU adopted the FASTER Directive during the Economic and Financial Affairs Council (“ECOFIN”). The FASTER Directive implements new regulations to establish faster and safer procedures for obtaining double taxation relief. These measures are designed to encourage cross-border investments and combat tax fraud. The FASTER Directive aims to enhance the safety and efficiency of withholding tax procedures within the EU for cross-border investors, national tax authorities and financial intermediaries. Cross-border investments are generally subject to double taxation, as both the source state of the income and the residence state of the investor may levy (withholding) taxes on the same income. Although tax treaties aim to mitigate double taxation, domestic withholding tax relief procedures are often difficult, time-consuming and/or expensive. These domestic procedures are also often prone to fraud. Therefore, the FASTER Directive aims to make withholding tax relief procedures faster and simpler, and also safer for fraud.
The FASTER Directive includes, amongst others, three main components to achieve the abovementioned aims:
(i) a common tax residence certificate,
(ii) fast-track WHT relief procedures and
(iii) standardized reporting obligations for financial intermediaries.
We refer to our previous publication about the FASTER Directive for a more detailed explanation of the three main components
The Member States will have to transpose the directive into national legislation by 31 December 2028, and the national rules will have to apply from 1 January 2030. For more information or any questions, do not hesitate to contact the Tiberghien Tax Team.
