Brussels (Brussels Morning Newspaper) – The Europen Council has assumed the latest regulations for withholding tax procedures (FASTER) to boost cross-border investment.
The EU Council on 10 Dec 2024 adopted new rules establishing secure and more rapid approaches to acquire double taxation relief that will facilitate cross-border investment and support the battle against tax scams. The directive known as FASTER seeks to make withholding tax procedures in the European Union secure and better for national tax authorities, cross-border investors and financial intermediaries, including investment forums and banks. The European Commission presented a bid for the FASTER directive in 2023.
How will FASTER improve cross-border investment and tax relief?
As reported by the EU Council, FASTER will present a joint European Union digital tax residence certificate (eTRC). The certificate would be utilised by tax-paying investors to satisfy the fast-track methods to acquire ease from withholding taxes. Member nations will deliver an automatic method to give digital tax residence certificates (eTRC) to a genuine person or commodity considered resident in their jurisdiction for tax objectives.
What are the key features of FASTER fast-track procedures?
FASTER will permit member nations to develop two fast-track systems completing the current formal refund policy for withholding taxes. The EU Council presented in the directive extra cases in which member nations may exclude, wholly or partly, proposals for withholding tax comfort from the fast-track courses, to conduct additional reviews, to stop scams. The EU Council also included conditions to the text concerning indirect investments for circumstances where the investor does not finance instantly insecurities but via a joint investment project.
How will the new standardized reporting benefit financial intermediaries?
Moreover, the new directive will establish a standardised reporting commitment for economic intermediaries such as investment forums and banks. The measure will make it more comfortable for national tax management to see potential tax scams or misuse. EU Council states that member nations will designate national registers where extensive financial intermediaries are required to document to be permitted. To facilitate this registration process, the EU Council arranged to form a European Certified Financial Intermediary Portal. It will serve as a major reliable website where the federal registers will be available.
