The proposal will obligate financial intermediaries to report information on payments of dividends to the relevant tax administration to ease the trace of the transaction. The information relates among other things to details on identity of the receiver of the dividend, the identity of the distributing entity, and information that could suggest abuse such as lending out of shares.
The directive proposes that these reporting requirements shall be met no later than 25 days after the record date, which in many cases will be the day before the payment of the dividend.
The directive also obligates the financial intermediaries to verify various information including on the tax residency of the registered owner and they must comply with anti-money laundering obligations regarding investors etc.
The proposal also suggests that the Member States establish rules which will make the financial intermediaries liable for a Member State's loss of tax income if obligations in the directive are not fulfilled and the intermediaries have acted with gross negligence or intend. It is also suggested that sanctions to financial intermediaries are enforced in cases of non-compliance with the reporting rules.