How the FASTER directive transform withholding tax refund?

On 10 January 2025, Council Directive (EU) 2025/50, known as the FASTER directive, was published in the Official Journal of the European Union. This directive aims to ensure faster and safer refunds of withholding tax overpayments. The directive will take effect on 30 January 2025, and member states must transpose it by 31 December 2028. The rules of the directive will come into force on 1 January 2030.

As we informed you in a previous article, the directive includes three key elements:

• A common EU digital tax residence certificate, which will contain standardized content regardless of the issuing member state;
• Two expedited procedures complementing the existing standard tax refund procedure in each member state, including:
  • a relief-at-source system and
  • a quick refund system. Member states concerned will be required to implement one of the two systems (or a combination thereof);
• The introduction of national registers for financial intermediaries who will be able to facilitate expedited procedures. Such financial intermediaries will be subject to additional due diligence and common reporting requirements.

For more detailed information, you can read the EU Tax Flash or E-News prepared by our colleagues from the KPMG EU Tax Centre.