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. 

More