The European Commission has published draft Directive for harmonized withholding tax procedures

Key highlights of the published proposal include:

• simplification would apply only to dividends of publicly traded shares (with the option to apply also to interest from publicly traded bonds)
• in order to benefit from the fast track systems it would be necessary to engage with certified financial intermediary
• a common EU-wide digital tax residency certificate would be used to prove tax residency status
• Member state would be able to choose one of two relief systems (or a combination of both): a relief at source system and a quick refund system

It is expected that the proposal will come into force on 1 January 2027. If you are interested in more detailed information please refer to our EU Tax Flash from KPMG’s EU Tax Centre.