Changes from report parliamentary committee draft to plenary report

AddedArticle 13 – paragraph 3 a (new): 3a. Member States may reject a refund request if any verification procedure or tax audit, based on risk assessment criteria and according to the national legislation, is initiated.

AddedArticle 15 – paragraph 1: Member States shall adopt appropriate measures to ensure that where Article 12 and Article 13 do not apply to dividends, because the conditions of this Directive are not met, a registered owner or its authorised representative requesting for refund of the excess withholding tax on such dividends provides at least the information required under Annex II, heading E, unless the total dividend paid to the registered owner on the owner’s shareholding in a company does not exceed EUR 1500, and unless this information has already been provided in accordance with the obligations of Article 9.

AddedArticle 18 a (new): Article 18a / Monitoring and exchange in information / 1. To ensure the integrity of the internal market the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) shall regularly monitor the risk for cum-cum and cum-ex in the Union. / 2. Member States shall introduce coordinated cooperation and mutual assistance between national competent authorities, tax authorities and other law enforcement bodies, such as the European Public Prosecutor’s Office (EPPO) to detect and prosecute illegal withholding tax reclaim schemes.

AddedArticle 19 – title: General evaluation, review and revision

AddedArticle 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 five years. A report on the evaluation of the Directive and on the applicable rules to withholding taxes in the Member States, including on a potential need to amend specific provisions of this Directive, will be submitted to the European Parliament and the Council by December 2031 and every 5 years. In the evaluation report, the Commission shall:

AddedArticle 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;

AddedArticle 19 – paragraph 1 – point b (new): (b) assess how the procedures for withholding tax relief can be further simplified for retail investors;

AddedArticle 19 – paragraph 1 – point c (new): (c) 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;

AddedArticle 19 – paragraph 1 – point d (new): (d) examine whether a relief at source system could be envisaged as a procedure for all Member States; and introduce further measures to facilitate such a system for small and medium-sized enterprises;

AddedArticle 19 – paragraph 1 – point e (new): (e) examine whether Member States are still impacted by or prone to dividend arbitrage and dividend stripping schemes such as the cum-ex and cum-cum schemes and whether existing measures within the field of withholding taxes are sufficient to combat tax fraud, tax evasion and tax avoidance or whether additional ones would be necessary, such as subjecting capital gains upon disposal of shares and security lending fees to taxation equivalent to dividends, as a way to deter and mitigate dividend arbitrage; the Commission shall in that regard collect evidence from Member States receiving support from EBA, ESMA, EPPO, and relevant national competent authorities;

AddedArticle 19 – paragraph 1 – point f (new): (f) consider further measures, if necessary, to ensure that all dividends, interest, capital gains, royalty payments, professional service payments and relevant contract payments generated in the Union are taxed at least once at an effective rate;

AddedArticle 19 – paragraph 1 – point g (new): (g) examine the potential of distribution ledger systems or other technological tools to render the system more efficient and fraud proof through better identification of the beneficial owner;

AddedArticle 19 – paragraph 1 – point h (new): (h) examine possible measures to digitalise relief and refund processes, and claims;

AddedArticle 19 – paragraph 1 – point i (new): (i) assess the acceptance of electronic or digital signatures and use of e-ID to facilitate the verification process for individual investors.

AddedArticle 19 – paragraph 1 – subparagraph 1 a (new): Where appropriate, the evaluation report shall be accompanied by a legislative proposal.

AddedArticle 19 – paragraph 2: 2. Member States shall communicate to the European Parliament and the Commission relevant statistical information for the evaluation referred to in paragraph 1, in accordance with paragraph 3.

AddedArticle 19 – paragraph 2 a (new): 2a. The European Commission shall in cooperation with Member States actively assess whether this Directive has an impact on risks for tax fraud and abuse, and the impact on tax revenues.

AddedArticle 19 – paragraph 3: 3. The Commission shall, by means of implementing acts, specify the statistical information to be provided by Member States for the purposes of evaluation and the format and the conditions of communication of that information.

AddedArticle 19 – paragraph 5: 5. Information communicated to the Commission by a Member State under paragraph 2, as well as any report or document produced by the Commission using such information, may be transmitted to the European Parliament and other Member States. The transmitted information shall be covered by the obligation of official secrecy and enjoy the protection extended to similar information under the national law of the Member State which received it.

AddedArticle 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. The rights of the data subjects shall be restored as soon as the conditions that supported the restriction cease to exist.

AddedArticle 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.