ECSDA Welcomes the Commission Proposal for Simpler Withholding Tax procedures
The European Central Securities Depositories Association (ECSDA) welcomes the European Commission Proposal for a new EU system for the avoidance of double taxation and prevention of tax abuse in the field of withholding tax. The proposal aims to simplify procedures for claiming cross-border withholding tax relief and eliminate tax barriers. These barriers have been highlighted in a variety of post-trade industry reports as a major impediment to the proper functioning of the CMU, free movement of capital and prevention of tax abuse faced by financial investors and intermediaries.
In the context of fair taxation in the EU and the fight against tax fraud, inefficient and burdensome withholding tax relief procedures are a barrier to cross-border investments and limit the EU’s efforts in removing barriers to completing a Capital Markets Union (CMU).
ECSDA salutes the intentions of:
- Enhancing EU competitiveness by a better functioning Single Market, thereby attracting investors;
- Reducing antiquated paper-based processes due to the digitalisation of withholding tax relief procedures;
- Reducing regulatory costs for investors as well as intermediaries thanks to the harmonisation of relief procedures; and
- Eliminating tax abuse by simplifying cumbersome, lengthy and resource-intensive processes that aim to avoid double taxation.
As one of the main barriers that deters investment across borders and deepening integration of the EU CMU, ECSDA looks forward to engaging with public and private stakeholders in sharing insights from CSDs.
Legal text of the Proposal for Council Directive
Annex to the Proposal for Council Directive