Proposal for a Council Directive on Faster and Safer Relief of Excess Withholding Taxes

EUROPEAN COMMISSION REGULATORY SCRUTINY BOARD OPINION Proposal for a COUNCIL DIRECTIVE on Faster and Safer Relief of Excess Withholding Taxes {COM(2023) 324 final } {SWD(2023) 215 final } {SWD(2023) 216 final } {SWD(2023) 217 final } Brussels, 12/05/2023 SEC(2023) 243 final EUROPEAN COMMISSION REGULATORY SCRUTINY BOARD Opinion Ref. Ares(2023)2832019 - 21/04/2023 Ref. Ares(2023)3325864 - 12/05/2023 Brussels, RSB Title: Impact assessment for the ‘New EU system for the avoidance of double taxation and prevention of tax abuse in the field of withholding taxes (WHT) Overall 2nd opinion: POSITIVE WITH RESERVATIONS (A) Policy context In the EU, investors may be obliged to pay tax on the income they receive from the holding of securities (dividends and interests) twice, first in the source country (withholding tax, WHT) and then in the country of residence of the investor (income tax). To avoid this double taxation, many countries have agreed to share tax rights by signing double tax treaties (DTTs), whereby non-resident investors may be entitled to a lower rate of withholding tax or to an exemption in the source country. This reduction or exemption of WHT may be granted either as a relief at source or through a refund procedure. However, the WHT refund procedures are often complicated and vary considerably among Member States. As a result, investors incur high costs, receive late refunds or even forego the right to refund...