The European Parliament’s plenary session adopted its opinion on 14 November 2024 after a consultation on the proposed Council Directive for the Faster and Safer Relief of Excess Withholding Taxes (FASTER).

The opinion endorses the compromise text of the draft directive proposed by the Belgian Presidency of the Council. This initiative aims to secure a political agreement among the Member States on the draft directive. The European Parliament approved Herbert Dorfmann’s drafted opinion with 555 votes in favor, 48 against, and 42 abstentions.

The opinion follows the Council of the European Union agreeing to adopt new regulations for withholding tax procedures under the Council Directive on FASTER on 14 May 2024.

On 28 July 2023, the Council consulted the Parliament on a proposal for a Council Directive on Faster and Safer Relief of Excess Withholding Taxes (FASTER). The Parliament delivered its opinion on 28 February 2024.

According to the agreed text by the Council, the directive will introduce a common EU digital tax residence certificate (eTRC) and two fast-track procedures complementing the existing standard refund procedure for withholding taxes, as proposed by the Commission. However, the deadlines for the issuance of the eTRC and the quick refund system have been prolonged, making the tax relief “less fast” than originally foreseen by the Commission’s proposal.

A key change is the exemption provided to Member States who already have a comprehensive relief-at-source system in place and who have a relatively small financial market, i.e. when their market capitalisation ratio is below a threshold of 1.5%.

The Directive further introduces a reporting obligation for financial intermediaries, who must register in national registers established pursuant to this Directive to request the fast-track procedures. The Council agreed to create a European Certified Financial Intermediary Portal to simplify the procedure.