The next meeting of the Economic and Financial Affairs (ECOFIN) Council is taking place on May 14, 2024. The Agenda highlights and a provisional agenda for this meeting have been published on the website of the European Council/the Council of the EU. The following 2 tax items are mentioned on the provisional agenda. But again the proposal for an unshell Directive is not mentioned on the provisional agenda.

FASTER

The Council will seek a political agreement on a proposal to make the relief of excess withholding taxes faster and safer (FASTER). This initiative aims to help fight tax abuse and to contribute to completing the EU capital markets union by encouraging cross-border investment.

On June 19, 2023 a Proposal for a Council Directive on Faster and Safer Relief of Excess Withholding Taxes and Annexes to the Proposal for a Council Directive on Faster and Safer Relief of Excess Withholding Taxes were released.

The European Commission proposed the following:

• A common EU digital tax residence certificate will make withholding tax relief procedures faster and more efficient;
• Two fast-track procedures complementing the existing standard refund procedure: a “relief at source” procedure and a “quick refund” system, which will make the relief process faster and more harmonised across the EU. Member States will be able to choose which one to use – including a combination of both:
  • Under the “relief at source” procedure, the tax rate applied at the time of payment of dividends or interest is directly based on the applicable rules of the double taxation treaty provisions;
  • Under the “quick refund” procedure, the initial payment is made taking into account the withholding tax rate of the Member State where the dividends or interest is paid, but the refund for any overpaid taxes is granted within 50 days from the date of payment;
• A standardised reporting obligation will provide national tax administrations with the necessary tools to check eligibility for the reduced rate and to detect potential abuse. Certified financial intermediaries will have to report the payment of dividends or interest to the relevant tax administration so that the latter can trace the transaction. In particular, large EU financial intermediaries will be required to join a national register of certified financial intermediaries. This register will also be open to non-EU and smaller EU financial intermediaries on a voluntary basis. Taxpayers investing in the EU through certified financial intermediaries will benefit from fast-track withholding tax procedures and avoid double taxation on dividend payments.

VAT in the digital age

The Council will seek a political agreement on the value added tax (VAT) in the digital age package. The package consists of three proposals that set out to tackle VAT fraud, support businesses and promote digitalisation.

On December 8, 2022 the European Commission proposed a series of measures to modernise and make the EU’s Value-Added Tax (VAT) system work better for businesses and more resilient to fraud by embracing and promoting digitalisation. The European Commission proposes:

• A move to real-time digital reporting based on e-invoicing for businesses that operate cross-border in the EU; and
• Updated VAT rules for passenger transport and short-term accommodation platforms; and
• The introduction of a single VAT registration across the EU.

In this respect a.o. the following documents were released on December 8, 2022.

• A Proposal for a Council Directive amending Directive 2006/112/EC as regards VAT rules in the Digital Age;
• A Proposal for a Council Regulation amending Regulation (EU) No 904/2010 as regards the VAT administrative cooperation arrangements needed for the digital age; and
• A Proposal for a Council implementing Regulation amending Implementing Regulation (EU) No 282/2011 as regards information requirements for certain VAT schemes.

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