FASTER Directive

The eTRC will be introduced with the intention of facilitating the expeditious and streamlined acquisition of withholding tax relief. For instance, an eTRC will be issued automatically within one business day of its request. Consequently, a single certificate will be sufficient to facilitate multiple refund claims within the same calendar year (potentially extending beyond this timeframe, contingent on the FASTER Directive's minimum requirements). 

The eTRC will facilitate the automation of relevant financial processes by intermediaries. It will be mandatory for such intermediaries to ascertain the veracity and substance of an eTRC, comparing it with their existing knowledge of the customer and to determine the applicable withholding tax rate under double taxation treaties and local legislation.

In Sweden, the option exists for a payer of dividends to apply reduced withholding tax already at the time of payment (direct relief at source), or for a recipient of dividends to apply for a refund. The process time for an application for a refund may be lengthy. The FASTER Directive offers two avenues for expeditious reduction of withholding tax: one entails reduction at the time of payment, while the other entails refund within 50 days. Member States have the option of selecting one of the aforementioned options or a combination of both.

In its proceedings, the Council introduced additional circumstances in which Member States may exclude, in whole or in part, applications for tax relief from the fast-track process. This is intended to facilitate the implementation of supplementary verification procedures for the purpose of preventing fraud.

Furthermore, the Council incorporated additional stipulations into the text pertaining to indirect investments in securities via a collective investment undertaking. The provisions guarantee that legitimate investors, such as specific collective investment undertakings or their respective investors, can utilise the fast-track process.

The FASTER Directive will introduce a standardised format for the reporting of withholding taxes to the relevant tax authorities. Financial intermediaries intending to act as withholding agents are obliged to register to apply relief at source. The registers will assist tax authorities in verifying the applied tax rates and detecting potential instances of abuse. Financial institutions operating within the EU that are classified as larger will be obliged to register, whereas those that are categorised as smaller, both within the EU and outside of it, will be permitted to register if they so choose.

The Council has resolved to establish a European portal for certified financial intermediaries, which will serve as a centralised website, providing access to the national registers.

Additionally, the Council has incorporated the option of indirect reporting, alongside direct reporting. In the case of direct reporting, a certified financial intermediary will submit information to the competent authority of the source Member State. Conversely, in the event of indirect reporting, each certified financial intermediary in the payment chain is responsible for providing the relevant data.

Furthermore, the Council concurred that sanctions should be imposed by Member States in instances where obligations set forth in the Directive are not fulfilled.

The agreed text of the FASTER Directive will be submitted to a legal-linguistic revision, after which the European Parliament will provide its opinion on the final text. Following this, the directive must be formally adopted by the Council before it is published in the Official Journal and enters into force.

Member states are required to transpose the directive into national law by 31 December 2028, with national rules to commence on 1 January 2030.