What changed between the draft committee report of 9 Oct 2023 and the draft committee report of 9 Oct 2024

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

Changed:on the proposal for adraft Council directive on Faster and Safer Relief of Excess Withholding Taxes

Changed:(COM(2023)0324(09925/2024 – C90204/2023C100002/2024 – 2023/0187(CNS))

Changed:(Special legislative procedure – renewed consultation)

The European Parliament,

Added:– having regard to the Council draft (09925/2024),

– having regard to the Commission proposal to the Council (COM(2023)0324),

Removed:– having regard to Article 115 of the Treaty on the Functioning of the European Union, pursuant to which the Council consulted Parliament (C90204/2023),

Added:– having regard to its position of 28 February 2024,

Removed:– having regard to Rule 82 of its Rules of Procedure,

Added:– having regard to Article 115 of the Treaty on the Functioning of the European Union , pursuant to which the Council consulted Parliament (C100002/2024),

Changed:– having regard to the report ofRule the84 Committeeand on86 Economicof andits MonetaryRules Affairsof (A90000/2023),Procedure,

Change 1

Removed:1. Approves the Commission proposal as amended;

Added:– having regard to the report of the Committee on Economic and Monetary Affairs (A100000/2024),

Removed:2. Calls on the Commission to alter its proposal accordingly, in accordance with Article 293(2) of the Treaty on the Functioning of the European Union;

Added:1. Approves the Council draft;

2. Calls on the Council to notify Parliament if it intends to depart from the text approved by Parliament;

Change 2

Changed:4.3. Asks the Council to consult Parliament again if it intends to substantially amend the Commissiontext proposal;approved by Parliament;

4. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Change 3

Removed:Recital 2: (2) In order to strengthen Member States’ ability to prevent and fight against potential fraud or abuse, which is currently hampered by fragmentation and a general lack of reliable and timely information on investors, it is therefore necessary to put in place a common framework for the relief of excess withholding taxes on cross-border investments in securities that is resilient to a risk of tax fraud or abuse. This framework should lead to convergence among the various relief procedures applied in the EU while ensuring transparency and certainty on investors’ identity for securities’ issuers, withholding tax agents, financial intermediaries and Member States, as the case may be. To this effect, the framework should rely on automated procedures, such as the digitalisation of the certificate of tax residence (in terms of procedure and form), which is a pre-requisite for investors to have access to any relief or refund procedures. Such a framework should also be flexible enough to duly take into account the various systems applicable in different Member States while ensuring greater convergence and providing appropriate anti-abuse tools to mitigate risks of tax fraud, evasion and avoidance. For the success of the framework, it is necessary that Member States equip the tax administrations with tools to deal with refund/relief at source procedures in a secure and timely manner and increase their efforts in providing digitalised, automated and better-coordinated key features. For …

Removed:Recital 4 a (new): (4 a) To ensure the effectiveness of the tax consequences of entities being determined as being shell entities, as foreseen by the Commission’s proposal for a Council directive laying down rules to prevent the misuse of shell entities for tax purposes and amending Directive 2011/16/EU1a (UNSHELL Directive), it is necessary that the procedures for imposing tax consequences in the UNSHELL Directive and the procedures for issuing an electronic tax residency certificate in this Directive are aligned. The Council should therefore 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. / 1a COM(2021)0565.

Removed:Recital 6: (6) As the financial intermediaries most often engaged in the securities’ payment chains are large institutions as defined in the Capital Requirements Regulation (CRR)29 as well as central securities depositories providing withholding tax agent services, these entities should be obliged to request registration on the national registers of Member States established as above. Other financial intermediaries should be allowed to request registration at their discretion. Registration should be requested by the financial intermediary itself by submitting an application to the competent authority designated by the Member State, including evidence that the financial intermediary meets certain requirements. The purpose of the requirements is to verify that the requesting intermediary meets the requirements of relevant EU regulation and supervised for compliance therewith. Where the financial intermediary is established outside the EU, it is required to be subject to legislation in the third country of its residence that is comparable for the purposes of this Directive and the third country of residence is neither on Annex I of the EU list of non-cooperative jurisdictions nor on the EU list of high-risk third countries (anti-money laundering list). Registration of a third country financial intermediary should be implemented with a minimum of administrative efforts. The Commission should assist Member States to ensure that there is a coordinated understanding regarding comparable legisl…

Removed:Recital 14: (14) Any processing of personal data carried out within the framework of this Directive should comply with Regulation (EU) 2016/679 of the European Parliament and of the Council31 . Financial intermediaries and Member States may process personal data under this Directive solely with the objective of serving a general public interest, namely for the purposes of combating tax fraud, tax evasion and tax avoidance, safeguarding tax revenues and promoting fair taxation, which strengthen opportunities for social, political and economic inclusion in Member States. To allow the effective pursuit of this objective, it is necessary to restrict certain rights of individuals provided by the aforementioned Regulation, insofar as the exercise of such rights may jeopardise investigations, especially the right to be notified on the processing of their data and the scope thereof as well as the right to consent on certain types of data processing. As soon as the circumstances that justified the restriction no longer apply, the rights of the data subjects should be reinstated.

Removed:Article 4 – paragraph 2 – introductory part: 2. Member States shall issue the eTRC within three working days from submission of a request, subject to paragraph 4. The eTRC shall comply with the technical requirements of Annex I and shall include the following information:

Removed:Article 4 – paragraph 2 – point g: deleted

Removed:Article 4 – paragraph 4: 4. If more than three working days are required to verify the tax residency of a specific taxpayer, the Member State shall inform the person requesting the certificate of the additional time needed and the reasons for the delay.

Removed:Article 7 – paragraph 1 – point b: (b) if the requesting financial intermediary is a credit institution, an authorisation in the jurisdiction of residence for tax purposes to perform custodial activities under points (12) or (14) of Annex I of Directive 2013/36/EU or comparable legislation of a third country; if the requesting financial intermediary is an investment firm, an authorisation in the jurisdiction of residence for tax purposes to perform custodial activities under Section B(1) of Annex I of Directive 2014/65/EU or comparable legislation of a third country or; if the requesting financial intermediary is a central securities depository, an authorisation in the jurisdiction of residence for tax purposes under Regulation EU 909/2014 or comparable legislation of a third country of residence; the Commission shall issue guidance on minimum standards for comparable legislation;

Removed:Article 19 – title: Evaluation and review

Removed:Article 19 – paragraph 1: 1. The Commission shall examine and evaluate the functioning of this Directive, after national rules transposing the Directive come into effect, every 3 years. A report on the evaluation of the Directive, including on a potential need to amend specific provisions thereof, will be submitted to the European Parliament and the Council by December 2031 and every 3 years. In the evaluation report, the Commission shall:

Removed:Article 19 – paragraph 1 – point a (new): (a) examine further possible measures to facilitate self-processed withholding tax claims for small investors who engage directly with tax authorities without the intermediation of certified financial intermediaries;

Removed:Article 19 – paragraph 1 – point b (new): (b) conduct a comprehensive analysis of the development of the service fees financial intermediaries charge registered owners for the implementation of the quick refund procedure and the relief at source procedure;

Removed:Article 19 – paragraph 1 – point c (new): (c) examine whether a relief at source system could be envisaged as a procedure for all Member States.

Removed:Article 19 – paragraph 1 – subparagraph 1 a (new): The Commission may submit, where appropriate, a legislative proposal to the Council.

Removed:Article 19 – paragraph 2: 2. Member States shall communicate to the European Parliament and the Commission relevant information for the evaluation of the Directive in improving withholding tax relief procedures to reduce double taxation as well as combat tax abuse, in accordance with paragraph 3.

Removed:Article 20 – paragraph 1: 1. Member States shall restrict data subject’s rights under Articles 15 to 19 of Regulation (EU) 2016/679 of the European Parliament and of the Council45, insofar as the exercise of such rights may jeopardise investigations and only to the extent and only as long as it is strictly necessary for their competent authorities to mitigate the risk of tax fraud, evasion or avoidance in Member States, in particular by verifying that the correct withholding tax rate is applied for the registered owner, or by verifying that the registered owner obtains the relief if so entitled in a timely manner.

Removed:Article 20 – paragraph 3: 3. Information, including personal data, processed in accordance with this Directive shall be retained only as long as necessary to achieve the purposes of this Directive, in accordance with each data controller’s domestic rules on statute of limitations, but in any case no longer than 5 years.