NEWSLETTER 16/05/2024

The Commission welcomes the agreement (‘general approach’) announced by the Belgian Presidency of the EU Council on the Commission's proposal for a Directive  to make withholding tax procedures in the EU more efficient and secure for investors, financial intermediaries and Member State tax administrations. A key initiative to ensure fair taxation and reinforce the Capital Markets Union, this agreement will digitise tax relief procedures and bring more transparency.   

In the case of cross-border investments, many Member States levy withholding taxes on dividends and on the interest from bonds paid to investors who live abroad. However, investors still must pay income tax in their country of residence for the same income and often need to submit a refund claim for excess tax paid. Currently, these refund procedures are often lengthy, costly, and cumbersome, causing frustration for investors and discouraging cross-border investment within and into the EU. Moreover, scandals like the Cum/Ex and Cum/Cum have shown that such refund procedures can be abused. For example, these types of fraud were estimated to have led to €150 billion in losses between the years 2000 and 2020 for a certain group of Member States. The action aims to address all these problems. 

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Recording available: Head Office Taxation System for SMEs event 

In April we hosted an information webinar about the European Commission’s proposal for a Head Office Taxation System which would simplify tax obligations for SMEs operating cross-borders. Did you miss it? You can now watch the recording in all EU languages! 

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A look back at the European Trust and Cooperation Approach (ETACA) Workshop 

In April, the Commission hosted the ETACA Workshop, with the participation of various stakeholders from the private sector and tax administrations of the Member States.  

The main objective of the Workshop was to capture the interest of the MNEs and the participating Member States to continue with the next steps of ETACA, including launching a Second Pilot. Overall, 18 Member States attended the Workshop and contributed to a fruitful discussion. The First Pilot received overall positive feedback from participating MNEs and the business community, particularly due to ETACA’s role in enhancing cooperation with tax administrations. Most of the Member States have informally expressed their interest in sustaining ETACA and continuing their participation in the programme.  

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Evaluation of administrative cooperation in the field of direct taxation 

Directive 2011/16/EU (directive on administrative cooperation - DAC) establishes a system for secure administrative cooperation between the national tax authorities of EU countries and lays down rules and procedures for exchanging information. 

This evaluation will assess the effectiveness, efficiency and continued relevance of the DAC and its amendments (DAC2 to DAC6), as well as its coherence with other policy initiatives & priorities and the EU added value. 

Have your say by 30 July 

Share your feedback: Revision of the rules on drug precursors 

The EU has strict rules to control the legitimate trade of drug precursors within the single market and at the EU borders. Nonetheless, these chemicals continue to be diverted towards the illicit production of drugs. In addition, criminals circumvent existing rules by tweaking substances, creating so-called designer precursors with no known licit use.  

As part of the EU’s zero-tolerance vision on drugs, the illicit use of drug precursors must be addressed.   

Have your say by 10 July