Neue IBFD-Veröffentlichung: eTRC unter EU-FASTER

European Union

The Electronic Tax Residence Certificate (eTRC) under the FASTER Directive: A Major Step towards EU Digital Tax Administration

Mariano Giralt Herrero
Lourdes Bustos^[*]

Issue: Finance and Capital Markets (formerly Derivatives & Financial Instruments), 2026 (Volume 27), No. 1

Published online: 5 May 2026

The FASTER Directive^[1] represents a pivotal step towards the digitalization and harmonization of withholding tax relief across the European Union. At its core lies the standardized, machine-readable electronic Tax Residence Certificate (eTRC), which replaces the previously unharmonized paper-based national certificates of residency of the EU Member States. The introduction of the eTRC addresses key challenges such as system fragmentation, legal uncertainties and operational inefficiencies. At the same time, it sets high standards for technical implementation, interoperability, data protection and national rollout. Through the eTRC, the FASTER Directive thus lays the foundation for an EU-wide, digitalized and automated withholding tax relief process – and could serve as a blueprint for future global standards.

1. Introduction to the FASTER Directive

The Council Directive (EU) 2025/50 of 10 December 2024 on Faster and Safer Relief of Excess Withholding Taxes, adopted on 10 December 2024 and published in the Official Journal of the European Union on 10 January 2025,^[2] commonly known by its English acronym “FASTER” (Faster and Safer Relief of Excess Withholding Taxes; hereinafter the FASTER Directive), aims to eliminate double taxation on dividends paid by European listed companies. To this end, it seeks to harmonize the procedural framework for withholding taxes so that the correct tax rate is withheld at the time of dividend payment or the excess amount is refunded within a short period of time within an automated framework.

Currently, investors lose over EUR 6 billion annually due to inefficient and costly dividend withholding tax refund procedures across the European Union, and nearly 70% of retail investors do not exercise their right to eliminate double taxation arising from dividend payments,^[3] either due to lack of information on how to obtain it or because the procedures to achieve effective relief are burdensome. This situation is not new; the Giovannini report published in 2001^[4] already identified withholding taxes as one of the main barriers to cross-border investment and, consequently, to the free movement of capital.

To address this issue, various approaches have been proposed over the past decades, both from the European Commission’s perspective – through the 2009 Recommendation^[5] or the 2017 Code of Conduct^[6] – and from an international standpoint, through the OECD’s TRACE model published in 2013,^[7] inspired by the US qualified intermediary system and already put…