Acupay Welcomes the European Commission’s “FASTER Initiative” Proposal
In June 2023, the European Commission (EC) published a proposal for a Council Directive as part of its “Faster and Safer Relief of Excess Withholding Taxes (FASTER)” initiative.
The proposal follows a public consultation which took place in 2022 (you can read about Acupay’s response to EC’s invitation here) and builds upon the Organisation for Economic Co-Operation and Development’s (OECD) and EC’s decade-long effort to simplify the administration of withholding tax – with the approval of the Treaty Relief and Compliance Enhancement (TRACE) implementation package in 2013 being a key milestone.
The pillars of the proposal are:
Adoption of a common EU digital tax residence certificate (eTRC).
Setup of a National Registers of Certified Financial Intermediaries (CFIs).
Establishment of a common Reporting Standard for the reporting of payment of dividends or interest to the relevant tax administration by CFIs.
Implementation of at least one of the fast-track procedures to complement existing standard refund procedures (if applicable):
A Relief at Source procedure, where the reduced WHT rate would apply directly at the time of interest or dividend payment.
A Quick Refund where the dividends or interest is paid, but the refund for any overpaid taxes is granted within 50 days from the date of payment.
The scope of application will be income paid on publicly traded shares to registered owners who are non-residents of the Member State, where that State provides relief of excess WHT, but Member States may choose to extend the application of the FASTER procedures to publicly traded bonds too.
As far as the adoption timeline is concerned, the proposal will follow the standard review procedure, but once approved, the proposal is expected to become effective starting on 1 January 2027.
Acupay welcomes the EC’s initiative to simplify and modernize the tax relief processes across the EU markets. The proposal taps into Acupay’s experience and expertise with pioneering and supporting relief at source and quick refunds in situations where it was previously impossible. In addition, our tax relief ecosystem vision developed in 2019 and current development roadmap are perfectly aligned with the Commission's proposals. As a provider of innovative services and cutting-edge technology specialized in enabling cross-border WHT relief for almost two decades, Acupay is ready to put all its experience and technological excellence into good use.
The Acupay team will continue to monitor the FASTER initiative and is planning development of a comprehensive set of solutions which will support and enable stakeholders to be in the best possible position and leverage the new opportunities created it. We will share more details at a later date.
For further information, please contact the Product Management and Client Engagement Team at product@acupay.com.