Herbert Dorfmann MEP (EPP, Italian) states that the interaction between the proposed ‘FASTER’ directive and the ‘UNSHELL’ directive needs to be clarified, in his draft report published for the European Parliament on Monday 9 October.
With ‘FASTER’, the European Commission proposed in June a new withholding tax procedure for cross-border financial income - dividends on shares and interest on bonds (see EUROPE 13204/18). This text is expected to make these rules more effective and more secure for investors, financial intermediaries such as banks and Member States’ tax authorities.
“Your rapporteur appreciates the efforts by the Commission to improve the patchwork of withholding tax procedures and to introduce a common EU-wide system for withholding tax on dividend or interest payments”, commented Mr Dorfmann in the explanatory memorandum. He expressed his support for the initiative.
“However, the success of FASTER depends on the commitment of the Member States, which must speed up their efforts to provide key elements that are digitalised, automated and better coordinated”, he added.
The rapporteur therefore called on the Council of the EU to “clarify the interaction between the tax consequences defined in the ‘UNSHELL’ directive and the issuing of an electronic tax residency certificate defined in this directive” in order to guarantee the effectiveness of the tax consequences of entities considered to be fictitious entities.
The ‘UNSHELL’ directive, which is intended to lay down rules to prevent the abuse of shell companies for tax purposes, is still under discussion in the EU Council (see EUROPE 13253/33).
Finally, Mr Dorfmann suggested that the text should provide for better protection of taxpayers’ personal data and a coordinated understanding of ‘comparable legislation’ when it comes to the registration of a third country financial intermediary.
To read the draft report: https://aeur.eu/f/919 (Original version in French by Anne Damiani)