The complexity of withholding tax processes in the EU is immense, with the 27 member states currently handling them in 27 different ways. This inconsistency leads to high levels of opacity and administrative burden for all involved. For decades, efforts have been made at the supranational level to make withholding tax systems more efficient, simpler, and standardized. Now, it seems a breakthrough has been achieved at the European level: the “FASTER” initiative (Framework for Access and Simplification of the Taxation of Earnings and Reliefs) promises significant changes for all stakeholders, including investors, banks, tax authorities, and businesses.
The European Commission aims to achieve two primary objectives with FASTER. Firstly, it seeks to enhance the attractiveness of the European capital market by making investment in European securities more appealing through faster, simpler, and more digital application processes. Secondly, the Commission, alongside national governments, aims to prevent and combat tax fraud. A more transparent and comprehensive tax reporting system, along with extensive liability for the financial industry, is intended to prevent incidents like the CumEx scandal in the future.
Our factsheet provides a forward-looking perspective on the impact of the FASTER initiative on the various stakeholders involved and draws initial conclusions from the viewpoints of banks, tax authorities, investors, and technology providers. It also examines how the FASTER directive aims to revolutionize cross-border investments and improve the EU’s tax landscape.
The factsheet offers an overview of the challenges and opportunities surrounding FASTER and the involved stakeholders. A summary of the key perspectives:
FASTER is a first step toward a unified and attractive capital market in the EU and might be significant leap for the digital processing of withholding tax. All stakeholders should view this change as an opportunity to implement systemic, digitised, and automated withholding tax processing.
The detailed factsheet is available for download here.
You can find more information and official documents regarding the adopted directive here:
The official EU press release is available for reading here: Taxation: Council agrees on new rules for withholding tax procedures (FASTER)
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RAQUEST helps the financial industry simplify global withholding tax processing and automate it as much as possible. With over 15 years of expertise in withholding taxes and a passion for efficient software solutions, the RAQUEST team aims to provide financial institutions with a central platform for reclaiming European withholding taxes in all investment markets. Serving as a nexus between policymakers, tax authorities, associations, and the financial industry, RAQUEST leads the technical and procedural implementation of digitisation steps, developing solutions for a connected financial industry.
