The European Commission proposed this Monday simpler withholding procedures in the European Union (EU), to save investors five billion euros a year and avoid losses with tax fraud of 150 billion euros.
In an initiative released this Monday in Brussels, with a view to simpler and more equitable taxation in the community, the institution proposes “new rules to make withholding procedures in the EU more efficient and secure for investors, financial intermediaries -for example, banks – and the tax administrations of the Member States”.
These are situations in which an investor, usually cross-border, resides in an EU Member State and is required to pay tax on interest or dividends earned in another country.
Currently, there are already bilateral double taxation agreements, which prevent the same person or company from taxing twice in the EU, providing for requests for refund of any tax paid in excess in another Member State, but these processes are usually long and expensive. , resulting in more than 450 forms in different languages throughout Europe.
The community executive then proceeds with standardized procedures to allow investors to save around 5,170 million euros a year, through a common digital certificate of tax residence in the EU that will make the procedures for the forgiveness of withholdings faster and more efficient. at origin, the exemption procedures at origin and fast. returns of up to 50 days (it is up to the countries to choose which one to use) and also a simplified declaration that will give national tax administrations the necessary tools to verify eligibility for the reduced rate and detect possible abuses.
At a press conference in Brussels, the European Commissioner for the Economy, Paolo Gentiloni, pointed out that around “30% of small investors have sold their portfolios in the EU due to this tax barrier”, this being “a situation that does not can be allowed.” to continue”.
“We work together with banks and financial intermediaries to make sure that what we propose to them works well for them, so that they can provide a better service at a lower cost to their clients, whether they are large or especially small investors”, advanced Paolo Gentiloni.
The proposal comes as recent tax fraud scandals (including Cum/Ex and Cum/Cum) are estimated to have caused losses of 150 billion euros between 2000 and 2020.
It will now be up to the EU countries to decide, unanimously, on these new rules proposed by the community executive and, once adopted by the Member States, they should enter into force on January 1, 2027.
Today’s proposal falls within the scope of initiatives to simplify business procedures and combat abusive tax practices.
Source: TSF
