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The European Commission has published draft Directive for harmonized withholding tax procedures

New FASTER Directive (Faster and Safer Relief of Excess Withholding Taxes) aims to simplify the system of withholding tax and its refund.

Key highlights of the published proposal include:

  • simplification would apply only to dividends of publicly traded shares (with the option to apply also to interest from publicly traded bonds)
  • in order to benefit from the fast track systems it would be necessary to engage with certified financial intermediary
  • a common EU-wide digital tax residency certificate would be used to prove tax residency status
  • Member state would be able to choose one of two relief systems (or a combination of both): a relief at source system and a quick refund system

It is expected that the proposal will come into force on 1 January 2027. If you are interested in more detailed information please refer to our EU Tax Flash from KPMG’s EU Tax Centre.

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