On 10 December 2024, the EU Council voted in favour of the EU Faster Directive. The EU Faster Directive aims at improving EU withholding tax refund/relief processes, for publicly traded shares and bonds.
Ultimate purpose is to minimize WHT refund procedures, by enabling eligible investors to claim relief-at-source from local WHT. For more background information, see the European Commission’s dedicated webpage.
Next steps
- As a next step, EU member states are obliged to implement the FASTER Directive by 1 January 2028, in order to apply from 2030 onwards.
- Governments are allowed to implement earlier if they wish so.
Takeaway
- The Directive represents a significant step towards simplifying withholding tax relief processes while imposing new compliance measures. Both financial intermediaries as well as (institutional) investors should be prepared to align with these changes once enacted.
- We recommend (publicly traded) businesses and fund managers to closely monitor the adoption of these rules by EU Member States, to timely anticipate on the operational benefits that the FASTER Directive will offer.