Brussels, 15 May 2024. Yesterday, the Council of the EU agreed on a new set of rules for the Faster and Safer Relief of Excess Withholding Taxes initiative. This directive is a crucial element in the Capital Market Union (CMU) agenda as it will reduce investment barriers and costs within the Single Market and tackle existing administrative barriers that pension funds are facing.
PensionsEurope appreciates this major step forward coming at a time when policymakers are reflecting on the CMU agenda. Pension funds members and beneficiaries will ultimately benefit from the improvements introduced by the directive. For many decades, withholding taxes were a major issue in cross-border investments. Recovering taxes could take many years and lead to high costs.
The introduction of EU digital tax residence certificate will address the overreliance on paper-based processes across the EU, while the establishment of fast-track procedures will streamline the existing withholding tax procedures.
The directive is now subject to a legal linguistic review and a phase of reconsultation with the European Parliament before its formal approval by the Council. Then, the text will be published in the Official Journal of the European Union.
Matti Leppälä, PensionsEurope Secretary General, shared his thoughts on the agreement: “PensionsEurope is delighted that the Member States responded positively to the challenges related to currently inefficient tax procedures. We would like to thank the impressive work carried out by the European Commission, the Spanish and the Belgian presidencies which led to this positive conclusion. As major institutional investors, pension funds will benefit from this directive, which will then have to be transposed into national laws. We will closely monitor this transposition phase.”
For media enquiries Please contact Thibault Paulet, Senior Policy Advisor at PensionsEurope.
