Proposal for a Council Directive amending Directive 2003/48/EC on taxation of savings income in the form of interest payments {SEC(2008) 2767} {SEC(2008) 2768}
Date: 2008-11-13
Institutions: European Commission
Subjects: interest, savings, tax on income, tax system

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 13.11.2008 
COM(2008) 727 final 

2008/0215 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE 

amending Directive 2003/48/EC on taxation of savings income in the form of interest 
payments 

{SEC(2008) 2767} 
{SEC(2008) 2768} 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1. 

INTRODUCTION 

Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of 
interest payments (the ‘EUSD’) has been applied in the EU Member States (MS) since 1 July 
2005. The ultimate aim of the EUSD, as agreed at the Santa Maria de Feira European Council 
of 19 and 20 June 2000 and at the ECOFIN Council meeting of 26 and 27 November 2000, is 
to  enable  savings  income  in  the  form  of  interest  payments  made  in  one  MS  to  beneficial 
owners  who  are  individuals  resident  for  tax  purposes  in  another  MS  to  be  made  subject  to 
effective taxation in accordance with the laws of their State of residence.  

However,  when  the  EUSD  became  applicable  in  2005,  it  was  apparent  that  further 
refinements  were  advisable  to  take  account  of  developments  in  savings  products  and  in 
investor  behaviour.  Domestic  tax  systems  have  also  shifted  towards  treating  income  from 
some types of innovative financial products as equivalent to interest from debt claims. To take 
account of developments such as these, the EUSD provides that the Commission shall report 
to  the  Council  every  three  years  on  its  operation  and,  where  appropriate,  propose  any 
amendments  necessary  in  the  light  of  these  reports  to  ensure  effective  taxation  of  savings 
income and to remove undesirable distortions of competition. 

Against  this  background,  the  Commission  presented  a  first  report  to  the  Council  on  15 
September  2008  (COM  (2008)552  final,  Council  Document  13124/08  FISC  117)  on  the 
application  of  the  EUSD  following  its  first  three  years  of  operation.  The  report  drew  on 
consultations held with the EU Member States’ tax administrations, data provided by them on 
the  first  two  tax  years  of  application  and  the  findings  of  an  expert  group  set  up  by  the 
Commission in 2007 to seek advice from business sectors concerned or likely to be concerned 
by the EUSD.  

As explained in the report, the EUSD has proven effective within the limits set by its scope. It 
has  also  had  indirect,  non-measurable,  positive  results  in  enhancing  taxpayers’  compliance. 
However, the review  process  has  demonstrated that the  current  coverage  of the EUSD  does 
not  fully  match  the  general  ambitions  expressed  in  the  Council  conclusions  of  26  and  27 
November  2000.  In  particular,  the  report  drew  attention  to  the  need  for  amendments  in 
relation  to  the  definitions  of  beneficial  owner  and  paying  agent,  the  treatment  of  financial 
instruments equivalent to those already explicitly covered, and some procedural aspects.  

On the basis of the report, the Commission proposes to amend the EUSD, taking into account 
the administrative burden involved and the opinions expressed by the tax administrations of 
the  MS  and  the  expert  group,  in  accordance  with  the  principles  of  subsidiarity  and 
proportionality as set out in Article 5 of the Treaty.  

2. 

COMMENTARY ON THE PROPOSED AMENDMENTS TO THE EUSD 

2.1. 

Article 1 of this proposal  

The  most  important  proposed  amendments  refer  to  the  definition  of  savings  income,  to 
accommodate  developments  in  savings  products  in  recent  years.  The  proposed  amendments 
are  intended  to  cover  not  only  savings  income  in  the  form  of  interest  payments,  but  other, 

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substantially  equivalent,  income  from  some  innovative  financial  products  and  from  certain 
life  insurance  products  that  are  comparable  to  debt  claim  products.  If  more  comprehensive 
solutions ensuring exchange of information between the tax administrations of EU MS on the 
full range of life insurance contracts were to be implemented, the need to cover benefits from 
these life insurance products under the EUSD could possibly be reconsidered.  

It  is  also  proposed  to  extend  the  scope  of  the  Directive  to  cover,  under  certain  conditions, 
interest payments obtained by some entities and legal arrangements for the ultimate benefit of 
individual beneficial owners. Significant refinements are also proposed to the definition of the 
‘paying agent upon receipt of an interest payment’, in order to improve the effectiveness of 
this mechanism and the legal certainty for market operators.  

Proposed amendments to Articles 1 and 2 of the EUSD 

Articles 1 and 2 currently deal only with interest payments made for the immediate benefit of 
individuals. The amendment proposed to Art. 1 is only to bring it into line with the enlarged 
definition of interest payment proposed for Art. 6. 

More  significant  amendments  are  proposed  to  Art.  2.  The  EUSD  does  not  currently  cover 
payments  made  to  legal  entities  and  arrangements  held  by  individuals.  This  limitation  may 
provide individuals with opportunities to circumvent the EUSD by using an interposed legal 
person or arrangement.  

Indiscriminate extension to cover all payments to legal entities and arrangements established 
in other MS or in non-EU jurisdictions would not seem an appropriate solution.  

A more efficient solution is to ask paying agents subject to the anti-money laundering (AML) 
obligations to use the information already available to them under these obligations, insofar as 
it  relates  to  the  actual  beneficial  owner(s)  of  a  payment  made  to  some  legal  persons  or 
arrangements  (‘look-through’  approach).  The  EU  paying  agents  should  only  focus  on  legal 
persons  and  arrangements  established  in  selected  jurisdictions  outside  the  EU,  where 
appropriate  taxation  of  interest  income  paid  to  these  legal  persons  or  arrangements  is  not 
ensured. When the beneficial owner identified for AML purposes is an individual resident in 
another  MS  of  the  EU,  the  payment  should  be  treated  by  the  EU  paying  agent  as  made 
directly to this beneficial owner. 

It should be noted that the look-through approach would not be the best option to identify the 
beneficial owner where economic operators established in the EU make interest payments to 
other economic operators also established in the EU and therefore falling within the definition 
of  ‘paying  agent’.  This  could  lead  to  multiplying  the  paying  agent’s  responsibilities  at 
different  layers  of  a  chain  of  payments.  In  this  case,  clarification  of  the  definition  and  the 
obligations of paying agents, as proposed in relation to Article 4, seems to be a more reliable 
and proportionate solution than a look-through approach. 

In  order  to  reduce  uncertainties  and  the  administrative  burden  on  paying  agents,  Annex  I 
includes a list of categories of entities and legal arrangements resident in non-EU jurisdictions 
which  do  not  ensure  appropriate  and  effective  taxation  of  income  obtained  by  such  entities 
and arrangements. The new Art. 18b provides procedures for adapting the Annex.  

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Proposed amendments to Art. 3 of the EUSD  

Three  main  refinements  of  Art.  3  are  proposed  concerning  the  residence  of  the  beneficial 
owner.  

The  first  is  to  ensure  regular  updating  of  the  information  on  the  permanent  address  of  the 
beneficial owner by asking paying agents to refer to the ‘best information available to them at 
a  payment  date’.  This  includes  information  required  for  anti-money  laundering  purposes  or 
other evidence to be determined in accordance with the procedures referred to in the new Art. 
18b.  

Secondly,  it  is  proposed  to  complement  the  ‘permanent  address’  approach  to  establish  the 
residence of the beneficial owner with one based on giving prior reference to official proof of 
tax  residence  in  a  specific  country  where  such  proof  has  been  voluntarily  provided  by  the 
beneficial  owner  to  the  paying  agent.  This  applies  to  valid  tax  residence  certificates  issued 
within the last three years. This amendment is in line with the ultimate aim of the EUSD.  

Furthermore,  it  is  proposed  that  when  the  paying  agent  has  official  documentation  proving 
that the residence for tax purposes of the beneficial owner is in a MS different from the one of 
the  permanent  address  because  of  diplomatic  privileges  or  other  international  rules,  the 
residence  for  the  purpose  of  the  EUSD  shall  be  the  tax  residence  according  to  that  official 
documentation. 

Proposed amendments to Art. 4 of the EUSD 

The broad concept of paying agent in paragraph 1 has proved to be relatively well understood 
and  does  not  appear  to  need  major  changes  apart  from  clarifying  the  responsibility  of  these 
agents  for  payments  made  to  their  customers  through  intermediaries  established  outside  the 
EU. However, the European Banking Federation has raised concerns about exceptional cases 
of passive receipt or passive payment, where the general principle that the paying agent is the 
last intermediary in the chain may not be consistently applied by all MS. At present, there is 
no common guidance regarding concepts of passive receipt or passive payment. This can lead 
to  duplication  of  tasks  or  to  situations  where  none  of  the  economic  operators  involved  is 
considered the paying agent. In order to avoid this, a change is proposed to require MS to take 
appropriate  measures  to  ensure  that  paying  agents’  responsibilities  in  respect  of  the  same 
interest payment do not overlap.  

Furthermore, in line with the proposed amendment to Art. 2 in relation to the application of 
the 'look-through' approach to payments to certain entities and legal arrangements established 
in countries outside the EU, it is clarified that a payment made or secured for the immediate 
benefit  of  an  entity  or  legal  arrangement  listed  in  Annex  I  shall  be  deemed  to  be  made  or 
secured  for  the  immediate  benefit  of  the  beneficial  owner,  as  defined  in  the  Anti-  Money 
Laundering provisions, of the entity or legal arrangement. 

The concept of ‘paying agent upon receipt’, contained in the original paragraphs 2 to 5, seems 
to have generated uncertainty and needs to be developed further.  

As  explained  in  relation  to  the  proposed  amendments  to  Art.  2,  an  extension  of  the  ‘look-
through’ approach to all the entities established in the EU MS seems to be disproportionate. 
However,  the  lack  of  alternative  mechanisms  covering  payments  to  untaxed  intermediate 
structures within the EU could encourage individuals to make extensive use of intermediate 

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structures  to  circumvent  the  EUSD.  Recent  cases  show  that,  where  the  ‘paying  agent  upon 
receipt’  concept  is  not  consistently  implemented,  room  is  left  for  abuse  and  distortions. 
Investment  funds  regulated  at  EU  level,  whose  income  is  relevant  for  the  purpose  of  the 
EUSD,  could  face  unfair  competition  from  other  intermediate  investment  structures,  which 
are ‘de facto’ excluded from the main definition of paying agent in Art. 4(1) since payments 
made  by  them,  even  if  generated  by  investment  in  debt  claims,  do  not  legally  qualify  as 
interest payments. 

Rather  than  abandoning  the  ‘paying  agent  upon  receipt’  concept,  the  concept  has  to  be 
clarified to ensure consistent application. The proposed amendment aims at moving from the 
present approach, where the main focus is on the upstream economic operator paying interest 
to the entities concerned, to an approach based on a ‘positive’ definition of the intermediate 
structures obliged to act as a ‘paying agent upon receipt’. 

This  would  mean  that  the  EUSD  shall  be  applied  by  these  structures  —  including  legal 
arrangements  such  as  certain  kinds  of  trusts  and  partnerships  —  upon  receipt  of  interest 
payments  from  any  upstream  economic  operator,  regardless  of  where  this  operator  is 
established (inside or outside the EU), as long as the beneficial owner is an individual resident 
in another EU MS.  

In  order  to  avoid  market  distortions,  the  new  definition  of  the  structures  acting  as  ‘paying 
agent  upon  receipt’  is  based  on  substantive  elements  rather  than  on  their  legal  form.  The 
proposed amendment favours a definition including all entities and legal arrangements which 
are  not  taxed,  at  least  on  that  part  of  their  income  arising  to  their  non-resident  participants, 
under  the  general  rules  for  direct  taxation  applicable  in  the  MS  where  the  entity  or  legal 
arrangement has its place of effective management and can be considered to be established/ 
resident. Only the following entities and legal arrangements are excluded: 

(a) 

(b) 

(c) 

(d) 

Investment funds covered by Art. 6 of the EUSD; 

Pension funds and assets relating to life insurance contracts; 

Entities and arrangements set up exclusively for charitable purposes; 

Cases  of  shared  beneficial  ownership  to  which  interest  payments  are 
made  by  an  economic  operator  that  has  identified  all  the  beneficial 
owners. 

A ‘positive’ list, including entities and arrangements to be considered as ‘paying agents upon 
receipt’  in  each  MS,  is  introduced  as  Annex  III.  The  proposed  new  Art.  18b  provides  a 
procedure for amending the Annex.  

The option in Art. 4(3) of the EUSD, of being treated as an investment fund under Art. 6, is 
maintained  only  for  those  entities  and  legal  arrangements  to  whose  assets  or  income  no 
beneficial owner is immediately entitled at the moment of receipt of the payment. If they do 
not  exercise  this  option,  they  will  be  obliged  to  act  as  ‘paying  agent  upon  receipt’  and  to 
consider as beneficial owners those individuals who contributed to their assets. 

The current obligations on ‘upstream’ economic operators under Art. 4(2), last sentence (and 
Art. 11(5)), of the EUSD is maintained only for interest payments made to those entities and 
legal  arrangements  in  other  MS  that,  having  regard  to  the  MS  where  the  place  of  effective 
management  is  situated  (which,  for  legal  arrangements,  will  be  the  State  of  the  permanent 

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address of the person who primarily holds legal title and primarily manages their property and 
income), are listed in the proposed Annex III. However, the list is not exhaustive for the MS. 
MS should take the necessary measures to ensure that all entities and legal arrangements other 
than those listed under (a), (b), (c) and (d) above, which are not taxed under the general rules 
for direct taxation and have the place of effective management on their territory act as ‘paying 
agent upon receipt’, regardless of whether these entities and legal arrangements are included 
in  the  list  of  Annex  III  or  of  the  information  actually  received  from  foreign  upstream 
economic operators. 

Proposed amendments to Art. 6 of the EUSD 

The EUSD is essentially aimed at ensuring taxation of savings income in the form of interest, 
which  is  taxable  according  to  fairly  similar  criteria  in  all  MS.  Through  the  adoption  of  the 
Council  conclusions  of  26  and  27  November  2000  on  the  essential  content  of  the  EUSD,  it 
was  nevertheless  acknowledged  that  sticking  to  a  formal  definition  of  interest  would  not  be 
effective and could lead to undesirable distortions of competition between direct and indirect 
investment  in  debt  claims.  Therefore  it  was  decided  to  include  in  the  definition  not  only 
income from debt claims (as in Art. 11 of the OECD Model Tax Convention on income and 
capital), but also interest income obtained through certain investment vehicles.  

The original decision to exclude all innovative financial products from the scope of the EUSD 
(Council conclusions of 25 May 1999 and 26-27 November 2000) was for the same reasons 
accompanied  by  an  express  statement  that  the  issue  should  be  re-examined  during  the  first 
review of the EUSD. 

At present, the EUSD can be circumvented by rearranging financial affairs in such a way that 
income,  whilst  benefiting  from  limitations  of  risk,  flexibility  and  an  agreed  return  on 
investment  equivalent  to  debt  claims,  remains  outside  the  formal  definition  of  interest. 
Therefore,  as  explained  above  in  relation  to  Articles  1  and  2,  it  is  proposed  to  redefine  the 
scope  of  the  EUSD  to  cover  interest  and  substantially  equivalent  income  deriving  from 
securities  that,  from  an  investor’s  viewpoint,  can  be  regarded  as  equivalent  to  debt  claims, 
because the risk is known and is not higher than that of debt claims.  

In order to allow paying agents to identify instruments falling within this scope, leaving aside 
sophisticated solutions based on particulars frequently not known by the paying agents (such 
as  the  composition  of  the  instrument  or  the  link  between  its  performance  and  income  from 
debt claims), the proposed new point (aa) in Art. 6 extends the scope of the EUSD to those 
securities which are equivalent to debt claims because the investor receives a return on capital 
whose conditions are defined at the issuing date, and also receives, at the end of the term of 
the securities, at least 95% of the capital invested , regardless of whether the underlying assets 
behind those securities include debt claims.  

At the same time, other refinements are proposed in relation to investment funds. 

As  regards  investment  funds  established  in  the  EU,  Art.  6  at  present  only  covers  income 
obtained  through  undertakings  for  collective  investment  in  transferable securities  authorised 
in  accordance  with  Directive  85/611/EEC  (‘UCITS’),  whose  parts  can  be  marketed  in  MS 
other than that  of establishment. However, income obtained  through undertakings and other 
collective  investment  funds  or  schemes  lacking  this  authorisation  (‘non-UCITS’)  are  in 
principle beyond the scope of the Directive, even if the non-UCITS have to be registered with 
and are subject to monitoring by the authorities of a MS. This income becomes relevant only 

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when non-UCITS are entities without legal personality and therefore are ‘paying agents upon 
receipt’.  In  practice  most  of  these  non-UCITS  without legal  personality  opt  to  be  treated  as 
UCITS.  Their  income  then  falls  under  Art.  6,  unlike  income  from  non-UCITS  with  legal 
personality.  

The result is an asymmetry in treatment among ‘non-UCITS’. This is neither in the interest of 
the  internal  market,  nor  was  it  intended  under  the  Council  conclusions  of  November  2000. 
Therefore,  it  appears  necessary  to  amend  Art.  6(1)(c)  and  (d),  replacing  the  reference  to 
Directive  85/611/EEC  with  a  reference  to  the  registration  of  the  undertaking  or  investment 
fund  or  scheme  in  accordance  with  the  rules  of  any  of  the  MS.  This  would  result  in  the 
application of the same rules not only to all UCITS, but also to all non-UCITS, irrespective of 
their legal form. 

As  regards  funds  established  outside  the  EU,  it  is  at  present  not  clear  whether  the  term 
‘undertakings  for  collective  investment  established  outside  the  territory’  encompasses  all 
investment  funds  irrespective  of  the  regulation  applicable  and  of  how  they  are  marketed  to 
investors. Therefore, the EUSD should be amended to refine this definition according to the 
existing  OECD  definition  of  ‘collective  investment  fund  or  scheme’.  This  definition  can  be 
shared with countries outside the EU and can ensure that interest income channelled through 
these vehicles is treated appropriately.  

It  is  also  proposed  to  supplement  Art.  6(6)  in  order  to  clarify  that  both  direct  and  indirect 
investment  made  by  collective  vehicles  in  debt  claims  and  in  securities  must  be  considered 
when calculating the percentage mentioned in other paragraphs of this Article, in line with the 
Council conclusions of 12 April 2005.  

In  relation  to  the  current  EUSD  definition  of  interest  payment,  some  MS  have  called  for  a 
radical extension to cover any kind of investment income, but those views are currently not 
widely  shared.  As  explained  in  the  review  report,  the  EUSD  may  not  be  the  most  suitable 
framework for improving cooperation between tax authorities on dividends or on capital gains 
from  speculative  financial  instruments  which  do  not  provide  substantial  capital  protection. 
Solutions  based  exclusively  on  exchange  of  information  would  also  seem  more  appropriate 
for ensuring that neither double taxation nor avoidance of any taxation arise in relation to life 
insurance contracts and pensions, given the existing differences in the national tax regimes of 
contributions  made  to  these  instruments  and  of  benefits  arising  from  them.  However,  until 
such  purely  information-exchange-based  solutions  become  fully  operational  under  Council 
Directive 77/799/EEC of 19 December 1977 concerning mutual assistance by the competent 
authorities of the MS in the field of direct taxation1, it seems necessary to extend the scope of 
the EUSD to benefits from those life insurance contracts which can be directly compared to 
undertakings for collective investment, since their actual positive performance from which the 
benefits  arise  is  fully  linked  to  income  from  debt  claims  or  equivalent  income  under  the 
EUSD and since they provide no significant biometric risk coverage (lower than 5% of capital 
invested, expressed as an average over the duration of the contract).  

Furthermore,  the  second  subparagraph  of  Art.  6(1)  and  Art.  6(8)  are  amended  to  create 
conditions for reliable application of the home country rule. This is necessary to allow paying 
agents  to  correctly  apply  the  EUSD  to  income  arising  from  undertakings  for  collective 
investment  established  in  other  countries.  Any  options  exercised  by  a  given  MS  for  its 

1 

OJ L 336, 27.12.1977, p. 15. 

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undertakings, together with the calculation of the percentages referred to in paragraphs 1(d) 
and 6 according to the implementing rules of that MS, are made binding on all the other MS.  

The new paragraphs 9 and 10 of Art. 6 provide for ‘grandfathering’ provisions in two cases: 
First, income under Art. 6(1)(aa) will be included provided that the securities were first issued 
on  or  after  the  1  December  2008.  Second,  benefits  from  life  insurance  contracts  under  Art. 
6(1)(e) will be included provided that the contract were first subscribed on or after the same 
date.  These  provisions  are  needed  to  ensure  that  the  securities  and  insurance  contracts 
concerned  are  appropriately  tracked  by  their  issuers  and  by  the  insurance  companies  for 
correct treatment by the downstream paying agents. 

Proposed amendments to Art. 8 of the EUSD 

A number of amendments are introduced in Art. 8 to improve the quality of the information 
reported.  

First,  in  order  to  solve  current  uncertainties  concerning  the  treatment  of  income  from  joint 
accounts  and  other  cases  of  shared  beneficial  ownership,  the  paying  agents  would  be 
explicitly requested to provide not only the identity and residence of all the beneficial owners 
concerned, but also details on whether the amount reported for each beneficial owner is the 
full amount, the actual share due to the beneficial owner, or an equal share.  

A second amendment is aimed at reducing the administrative burden of the State of residence 
of the beneficial owner by overcoming the current limits of Art. 8(2), which do not ask the 
paying  agent  and  the  reporting  MS  to  distinguish  between  amounts  referring  to  the  interest 
component of a payment and those referring to the full proceeds from a sale, redemption or 
refund of a security. It will also make it easier to measure the effectiveness of the EUSD. 

Finally,  the  information  to  be  provided  by  paying  agents  is  adapted  in  accordance  with  the 
proposed amendments to Art. 2 and 6 of the EUSD. 

Proposed amendments to Art. 11 of the EUSD 

The  procedures  for  applying  withholding  tax  during  the  transitional  period  are  amended  in 
accordance with the proposed amendments to Articles 4, 6, and 8 of the EUSD.  

Proposed amendments to Art. 13 of the EUSD 

Art. 13 currently provides for two procedures for exception to the withholding tax: certificate 
and voluntary disclosure. The procedure allowing the beneficial owner to submit a certificate 
does not provide any directly usable detail to the State of residence  of the beneficial owner 
and  is  less  practical  for  him/her  than  the  voluntary  disclosure  procedure.  The  additional 
burden put on the tax administration of the State of the paying agent by the application of the 
voluntary disclosure procedure is offset by the reduced burden on the State of residence of the 
beneficial owner. Moreover, the application of the certificate procedure can raise questions of 
compatibility with the free movement of capital, e.g. because it makes it difficult for an EU 
citizen  who  is  tax  resident  outside  the  EU  to  avoid  a  withholding  tax  for  which  he  cannot 
obtain a credit or reimbursement. It is therefore proposed to amend Art. 13 to only allow only 
the voluntary disclosure procedure. 

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Proposed amendment to Art. 15 of the EUSD 

The  reference  to  the  Annex  with  the  list  of  related  entities  acting  as  a  public  authority  or 
whose  role  is  recognised  by  an  international  treaty  has  to  be  changed  because  of  the 
introduction of new annexes. 

Proposed amendments to Art. 18 of the EUSD 

The  competent  authorities  of  the  MS  are  invited  to  provide  the  Commission  with  relevant 
statistics on the application of the EUSD, in order to improve the quality of the information 
for the Commission report to be presented to the Council every three years. 

Proposed new Articles 18a and 18b of the EUSD 

New Articles 18a and 18b are introduced to provide for procedures to adapt the lists included 
in  the  Annexes  with  the  assistance  of  a  committee.  This  committee  on  administrative 
cooperation for taxation will also assist in establishing the information to be contained in any 
central register of the identity and residence of beneficial owners which may be maintained by 
a  paying  agent  having  activities  in  different  Member  States  (the  possibility  of  having  such 
register  has  been  requested  by  some  categories  of  market  operators),  lists  of  documents 
identifying  the  beneficial  owners  and  a  list  of  agreed  data  providers  of  the  information 
necessary  for  appropriate  treatment  by  paying  agents  of  income  deriving  from  collective 
investment vehicles or specific securities. Common formats and procedures for the exchange 
of  information  and  common  forms  for  certificates  and  other  documents  useful  for  the 
application  of  the  Directive  may  also  be  established  with  the  assistance  of  the  committee. 
Reference  is  made  in  Art.  18b  to  the  Council  Decision  of  28  June  1999  laying  down  the 
procedures  for  the  exercise  of  implementing  powers  conferred  on  the  Commission  with  the 
assistance of the committee. 

Proposed amendments relating to Annexes to the EUSD 

The Annex in the current Directive becomes Annex IV and the following new Annexes have 
been  introduced  mainly  in  order  to  provide  clarity  to  paying  agents  and  to  limit  their 
administrative burden (Annex V is a list of statistics that will have to be made available by 
MS to the Commission in line with Council conclusions adopted on 26 May 2008): 

(a) 

(b) 

(c) 

Annex  I:  ‘List  of  legal  forms  of  entities  and  legal  arrangements  to  which 
Article 2(3) applies if they are resident, because of the presence there of their 
place  of  effective  management,  within  the  territory  of  specific  countries  or 
jurisdictions’; 

Annex  II:  ‘List  of  Member  States  attributing  a  tax  identification  number,  at 
least  on  request,  to  any  of  the  individuals  who  are  resident  for  tax  purposes 
within their territory, regardless of his or her nationality’; 

Annex III: ‘Indicative list of ‘paying agents on receipt’ under the provisions of 
Article 4(2)’, and 

(d) 

Annex V: ‘List of items for statistical purposes’. 

EN 

9 

   EN 

 
2.2. 

Article 2 of this proposal 

This  Article  lays  down  the  timetable  and  the  requirements  for  transposing  the  amending 
Directive into national law. The amendments will have to be applied within Member States’ 
territory from the first day of the third calendar year following the calendar year in which the 
Directive  enters  into  force.  National  implementing  rules  should  be  adopted  and  publish 
sufficiently  in  advance  to  allow  paying  agents  and  the  other  market  operators  concerned  to 
adapt  their  procedures  by  should  be  adopted  and  publish  sufficiently  in  advance  to  allow 
paying agents and the other market operators concerned to adapt their procedures by the date 
of entry into application of the amendments. 

EN 

10 

   EN 

 
2008/0215 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE 

amending Directive 2003/48/EC on taxation of savings income in the form of interest 
payments 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 
94 thereof,  

Having regard to the proposal from the Commission2,  

Having regard to the opinion of the European Parliament3, 

Having regard to the opinion of the European Economic and Social Committee4, 

Whereas: 

(1) 

(2) 

Council  Directive  2003/48/EC5  has  been  applied  in  the  Member  States  since  1  July 
2005  and  has  proven  effective  during  its  first  three  years  of  application,  within  the 
limits set by its scope. However, it appears from the first report6 on the application of 
Directive  2003/48/EC  that  that  Directive  does  not  fully  measure  up  to  the  ambitions 
expressed  in  the  unanimous  ECOFIN  Council  conclusions  of  26  and  27  November 
20007.  In  particular,  certain  financial  instruments  which  are  equivalent  to  interest-
bearing securities and certain indirect means of holding interest-bearing securities are 
not covered.  

Directive  2003/48/EC  applies  only  to  interest  payments  made  for  the  immediate 
benefit  of  individuals.  Individuals  resident  in  the  Community  may  thus  circumvent 
Directive  2003/48/EC  by  using  an  interposed  legal  entity  or  arrangement,  especially 
one  established  in  a  jurisdiction  where  taxation  of  income  paid  to  this  entity  or 
arrangement is not ensured. Having regard also to the anti-money laundering measures 
laid down in Directive 2005/60/EC of the European Parliament and of the Council of 
26 October 2005 on the prevention of the use of the financial system for the purpose of 
money laundering and terrorist financing8, it is therefore appropriate to require paying 
agents to apply a "look-through approach" to payments made to certain kinds of legal 

2 
3 
4 
5 
6 
7 
8 

OJ C XXX, XX.XX.2008, p.XX 
OJ C XXX, XX.XX.2008, p.XX 
OJ C XXX, XX.XX.2008, p.XX 
OJ L 157, 26.6.2003, p. 38. 
COM(2008) 552, Council Document 13124/08 FISC 117. 
Council document nr. 13898/00 adopting with changes Council document nr. 13555/00. 
OJ L 309, 25.11.2005, p. 15. 

EN 

11 

   EN 

 
                                                 
(3) 

(4) 

(5) 

entities  or  arrangements  established  outside  the  Community,  and  to  use  the 
information already available to them about the actual beneficial owner(s) of the entity 
or arrangement in order to apply Directive 2003/48/EC when the beneficial owner so 
identified  is  an  individual  resident  in  a  Member  State  other  than  the  one  where  the 
paying  agent  is  established.  In  order  to  reduce  uncertainties  and  the  administrative 
burden  on  paying  agents,  a  list  of  entities  and  arrangements  in  third  country 
jurisdictions  concerned  by  this  measure  should  be  set  out  in  an  annex  to  Directive 
2003/48/EC.  

In order better to achieve the aim of Directive 2003/48/EC, the quality of information 
used to establish the identity and residence of beneficial owners should be improved, 
whilst  minimising  any  additional  administrative  burden  for  paying  agents.  Paying 
agents should use the best information available to them, including documents proving 
that the residence for tax purposes of an individual is in a country other than that of his 
permanent  address.  In  particular,  recourse  by  paying  agents  to  the  tax  identification 
numbers  of  beneficial  owners  should  be  facilitated  by  means  of  an  annex  providing 
information  on  such  numbers.  Paying  agents  having  activities  in  different  Member 
States should be permitted to maintain a central register of the identity and residence 
of  beneficial  owners,  and  common  rules  should  be  established  governing  the 
information to be contained in such a register.  

In  order  to  avoid  the  circumvention  of  Directive  2003/48/EC  through  the  artificial 
channelling  of  an  income  payment  via  an  economic  operator  established  outside  the 
Community,  it  should  be  made  clear  what  are  the  responsibilities  of  Community 
economic operators when they are aware that an interest payment made to an operator 
established  outside  the  territorial  scope  of  Directive  2003/48/EC  is  made  for  the 
benefit of an individual, known by them to be a resident of another Member State and 
who  can  be  considered  their  customer.  In  such  circumstances,  those  economic 
operators  should  be  considered  to  be  acting  as  paying  agents.  This  would  also  in 
particular  help  to  prevent  a  possible  misuse  of  the  international  network  of  financial 
institutions  (branches,  subsidiaries,  associated  or  holding  companies)  to  circumvent 
Directive 2003/48/EC.  

Experience has shown that greater clarity is necessary regarding the obligation to act 
as a paying agent upon receipt of an interest payment. In particular, the intermediate 
structures which are subject to that obligation should be identified clearly. Entities and 
legal arrangements which, under the general rules for direct taxation applicable in the 
Member State where they have their place of effective management, are not taxed on 
their  income  or  on  the  part  of  their  income  arising  to  non-resident  beneficiaries, 
including  savings  interest  or  substantially  equivalent  income,  should  apply  the 
provisions  of  Directive  2003/48/EC  upon  receipt  by  them  of  any  interest  payment 
from any upstream economic operator. A list of such entities and legal arrangements in 
each Member State should be included in an annex.  

(6) 

It  appears  from  the  first  report  on  the  application  of  Directive  2003/48/EC  that 
Directive 2003/48/EC may be circumvented by the use of financial instruments which, 
having regard to the level of risk, flexibility and agreed return, are equivalent to debt 
claims. It is therefore necessary to ensure that Directive 2003/48/EC covers not only 
interest but other substantially equivalent income.  

EN 

12 

   EN 

 
(7) 

(8) 

Similarly,  certain  categories  of  life  insurance  contracts  providing  very  limited 
biometric  risk  coverage  and  whose  performance  is  fully  linked  to  income  from  debt 
claims or equivalent income covered by Directive 2003/48/EC are generally regarded 
as substitute retail investment products to undertakings for collective investment. The 
scope  of  Directive  2003/48/EC  should  therefore  be  extended  to  benefits  paid  under 
such contracts. 

As regards investment funds established in the Community, Directive 2003/48/EC at 
present covers only income obtained through undertakings for collective investment in 
transferable securities authorised in accordance with Council Directive 85/611/EEC of 
20  December  1985  on  the  coordination  of  laws,  regulations  and  administrative 
provisions relating to undertakings for collective investment in transferable securities 
(UCITS)9.  Equivalent  income  from  non-UCITS  falls  within  the  scope  of  Directive 
2003/48/EC only when non-UCITS are entities without legal personality and therefore 
act as paying agents on receipt of interest payments. In order to ensure the application 
of the same rules to all UCITS and non-UCITS independently of their legal form, the 
reference in Directive 2003/48/EC to Directive 85/611/EEC should be replaced with a 
reference  to  the  registration  of  the  undertaking  or  investment  fund  or  scheme  in 
accordance with the rules of any of the Member States.  

(9) 

As regards funds established outside the Community, it is necessary to make clear that 
the Directive encompasses interest and equivalent income from all investment funds, 
irrespective of their legal form and of how they are placed with investors.  

(10)  The  definition  of  interest  payment  should  be  clarified  to  ensure  that  not  only  direct 
investments in debt claims but also indirect investments are taken into account in the 
calculation of the percentage of the assets invested in such instruments. Furthermore, 
in  order  to  facilitate  the  application  by  paying  agents  of  Directive  2003/48/EC  to 
income  arising  from  undertakings  for  collective  investment  established  in  other 
countries,  it  should  be  made  clear  that  the  treatment  of  certain  income  of  such 
undertakings is governed by the rules laid down in the Member State in which they are 
established.  

(11) 

Information  reporting  by  paying  agents  should  be  improved  to  increase  the  value  of 
the information for the State of residence of beneficial owners, particularly in regard to 
income from joint accounts and other cases of shared beneficial ownership. 

(12)  The "certificate" procedure allowing beneficial owners resident for tax purposes in one 
Member  State  to  avoid  the  imposition  of  a  withholding  tax  on  interest  received  in 
another  Member  State  listed  in  Article  10(1)  of  Directive  2003/48/EC  should  be 
abandoned,  as  less  information  is  obtained  from  that  procedure  than  from  the 
alternative procedure of voluntary disclosure to the State of residence of the beneficial 
owner and as it is more cumbersome for beneficial owners. 

(13)  Member  States  should  provide  relevant  statistics  on  the  application  of  Directive 
2003/48/EC in order to improve the quality of information held by the Commission for 
the preparation of the report on the application of that Directive that is presented to the 
Council every three years. 

9 

OJ L 375, 31.12.1985, p. 3. 

EN 

13 

   EN 

 
                                                 
(14)  Since  the  measures  necessary  for  the  implementation  of  Directive  2003/48/EC  are 
measures  of  general  scope  within  the  meaning  of  Article  2  of  Council  Decision 
1999/468/EC  of  28  June  1999  laying  down  the  procedures  for  the  exercise  of 
implementing powers conferred on the Commission,10 they should be adopted by use 
of the regulatory procedure provided for in Article 5 of that Decision. 

(15)  Since the objectives of this Directive cannot be sufficiently achieved by the Member 
States and can therefore be better achieved at Community level, the Community may 
adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 
of  the  Treaty.  In  accordance  with  the  principle  of  proportionality,  as  set  out  in  that 
Article, this Directive does not go beyond what is necessary in order to achieve those 
objectives, 

HAS ADOPTED THIS DIRECTIVE: 

Article 1 

Directive 2003/48/EC is amended as follows: 

(1) 

Article 1(2) is replaced by the following: 

“2.Member  States  shall  take  the  necessary  measures  to  ensure  that  the  tasks 
necessary  for  the  implementation  of  this  Directive  are  carried  out  by  paying 
agents  established  within 
the  place  of 
territory, 
establishment  of  the  debtor  of  the  debt  claim,  or  the  issuer  of  the  security, 
producing the interest payment.” 

irrespective  of 

their 

(2) 

Article 2 is amended as follows: 

(a)  Paragraph 1 is amended as follows: 

(i)  The introductory phrase is replaced by the following: 

“For  the  purposes  of  this  Directive,  and  without  prejudice  to  Article  4(2), 
‘beneficial  owner’  means  any  individual  who  receives  an  interest  payment  or 
any  individual  for  whom  such  a  payment  is  secured,  unless  he  provides 
evidence that it was not received or secured for his own benefit, that is to say 
that:” 

(ii)  Point (b) is replaced by the following: 

“(b)  he acts on behalf of an entity or a legal arrangement and discloses 
the  name,  the  legal  form  and  the  address  of  the  place  of  effective 
management of the entity or, in the case of a legal arrangement, the 
name and the permanent address of the person who primarily holds 
legal  title  and  primarily  manages  its  property  and  income,  to  the 
economic operator making or securing the interest payment, or” 

10 

OJ L 184, 17.7.1999, p. 23. 

EN 

14 

   EN 

 
                                                 
(b)  The following paragraph 3 is added: 

“3.Where  an  economic  operator  within  the  scope  of  Article  2  of  Directive 
2005/60/EC of the European Parliament and of the Council11 makes an interest 
payment  to,  or  secures  such  a  payment  for,  an  entity  or  a  legal  arrangement 
corresponding to those set out in Annex I, the definition in paragraph 1 of this 
Article  shall  include  the  beneficial  owner,  as  defined  in  Article  3(6)  of 
Directive 2005/60/EC, of such entity or legal arrangement.” 

(3) 

Articles 3 and 4 are replaced by the following:  

"Article 3 

Identity and residence of beneficial owners 

1. 

2. 

Each Member State shall, within its territory, adopt and ensure the application 
of the procedures necessary to allow the paying agent to identify the beneficial 
owners and their residence for the purposes of Articles 8 to 12. 

Such  procedures  shall  comply  with  the  minimum  standards  established  in 
paragraphs 2 and 3. 

The  paying  agent  shall  establish  the  identity  of  the  beneficial  owner  on  the 
basis  of  minimum  standards  which  vary according to  when  relations  between 
the paying agent and the recipient of the interest payment are entered into, as 
follows: 

(a) 

(b) 

for  contractual  relations  entered  into  before  1  January  2004,  the  paying 
agent shall establish the identity of the beneficial owner, consisting of his 
name and address, by using the information at its disposal, in particular 
pursuant  to  the  regulations  in  force  in  its  State  of  establishment  and  to 
Directive 2005/60/EC; 

for  contractual  relations  entered  into,  or  transactions  carried  out  in  the 
absence  of  contractual  relations,  on  or  after  1  January  2004,  the  paying 
agent shall establish the identity of the beneficial owner, consisting of the 
name, address, date and place of birth and, if the beneficial owner has his 
address or otherwise proves to be resident for tax purposes in a Member 
State  listed  in  Annex  II,  the  tax  identification  number  or  equivalent 
allocated by that Member State.  

The details referred to in point (b) of the first subparagraph shall be established 
on  the  basis  of  the  passport  or  of  the  official  identity  card  or  other  official 
document  listed  in  Annex  II  presented  by  the  beneficial  owner.  Any  such 
details which do not appear on that passport or on that official identity card or 
official  document  shall  be  established  on  the  basis  of  any  other  official 
documentary proof of identity presented by the beneficial owner and issued by 
a public authority of the country where he has his address or otherwise proves 
to be resident for tax purposes.  

11 

OJ L 309, 25.11.2005, p. 15. 

EN 

15 

   EN 

 
                                                 
3.  Where  the  beneficial  owner  voluntarily  presents  a  tax  residence  certificate 
issued  by  the  competent  authority  of  a  country  within  the  last  three  years 
before the payment date, his residence shall be considered to be situated in that 
country.  Failing  this,  his  residence  shall  be  considered  to  be  situated  in  the 
country where he has his permanent address. The paying agent shall establish 
the  permanent  address  of  the  beneficial  owner  on  the  basis  of  the  following 
minimum standards:  

(a) 

(b) 

for  contractual  relations  entered  into  before  1  January  2004,  the  paying 
agent  shall  establish  the  current  permanent  address  of  the  beneficial 
owner by using the best information at its disposal at a payment date, in 
particular pursuant to the regulations in force in its State of establishment 
and to Directive 2005/60/EC; 

for  contractual  relations  entered  into,  or  transactions  carried  out  in  the 
absence  of  contractual  relations,  on  or  after  1  January  2004,  the  paying 
agent  shall  establish  the  current  permanent  address  of  the  beneficial 
owner  on  the  basis  of  the  address  resulting  from  the  identification 
procedures set out in point (b) of paragraph 2 to be updated on the basis 
of  the  most  recent  documentation  that  is  available  to  the  paying  agent. 
This  information  shall  be  updated  at  the  latest  when  the  passport  or 
official  identity  card  or  other  official  documentary  proof  of  identity 
presented by the beneficial owner expires.  

For contractual relations entered into, or transactions carried out in the absence 
of contractual relations, on or after 1 January 2004, by individuals presenting a 
passport or official identity card or other official documentary proof of identity 
issued  by  a  Member  State  who  declare  themselves  to  be  resident  in  a  third 
country, residence shall be established by means of a tax residence certificate 
issued  within  the  last  three  years  before  the  payment  date  by  the  competent 
authority  of  the  third  country  in  which  the  individual  claims  to  be  resident. 
Failing  the  presentation  of  such  a  certificate,  the  Member  State  which  issued 
the  passport  or  other  official  identity  document  shall  be  considered  to  be  the 
country of residence. For individuals about whom the paying agent has official 
documentation  at  its  disposal  proving  that  they  have  their  residence  for  tax 
purposes in a country different from that of their permanent address because of 
the privileges linked to their diplomatic status or to other internationally agreed 
rules,  residence  shall  be  established  by  means  of  such  official  documentation 
available to the paying agent.  

Article 4 

Paying agents  

1.  An  economic  operator  who  makes  an  interest  payment  as  defined  in  Article 
6(1) to, or secures such a payment for, the immediate benefit of the beneficial 
owner  shall  be  considered  to  be  a  paying  agent  for  the  purposes  of  this 
Directive. A payment made or secured for the immediate benefit of an entity or 
legal arrangement listed in Annex I shall be deemed to be made or secured for 
the  immediate  benefit  of  the  beneficial  owner,  as  defined  in  Article  3(6)  of 
Directive 2005/60/EC, of the entity or legal arrangement.  

EN 

16 

   EN 

 
For  the  purposes  of  this  paragraph,  it  is  irrelevant  whether  the  economic 
operator concerned is the debtor or issuer of the debt claim or security which 
produces the income or the economic operator charged by the debtor or issuer 
or by the beneficial owner with paying the income or securing the payment of 
the income.  

Member  States  shall  take  appropriate  measures  to  ensure  that  there  is  no 
overlap of paying agent responsibilities in respect of the same interest payment. 

An economic operator established in a Member State shall also be considered 
to  be  a  paying  agent  for  the  purposes  of  this  Directive  where  the  following 
conditions are met: 

(a) 

(b) 

it makes an interest payment as defined in Article 6(1) to, or secures such 
a  payment  for,  another  economic  operator  established  outside  the 
territory  referred  to  in  Article  7  and  outside  the  territorial  scope  of 
application  of  the  agreements  and  arrangements  referred  to  in  Article 
17(2), and  

the  first  economic  operator  has  evidence  that  the  second  economic 
operator  will  pay  the  income  to,  or  secure  such  a  payment  for  the 
immediate benefit of, a beneficial owner who is an individual known by 
the  first  economic  operator  to  be  a  resident  of  another  Member  State, 
having regard to Article 3.  

Where the conditions referred to in points (a) and (b) are met, a payment made 
or  secured  by  the  first  economic  operator  for  the  immediate  benefit  of  the 
second economic operator shall be deemed to be made or secured by the first 
economic operator for the immediate benefit of the beneficial owner referred to 
in point (b). 

2.  An entity or legal arrangement which is not taxed on its income or on the part 
of its income arising to its non-resident participants, including on any interest 
payment, under the general rules for direct taxation applicable in the Member 
State  in  which  the  entity  or  legal  arrangement  has  its  place  of  effective 
management,  shall  be  considered  a  paying  agent  upon  receipt  of  an  interest 
payment or upon securing of such payment.  

For  the  purpose  of  the  first  subparagraph  a  legal  arrangement  shall  be 
considered to have its place of effective management in the country where the 
person who primarily holds legal title and primarily manages its property and 
income has his or its permanent address.  

The  payment  received  or  secured  by  the  entity  or  legal  arrangement  shall  be 
regarded as having been made directly to, or secured for the immediate benefit 
of,  any  individual  who  is  legally  entitled  to  the  assets  or  the  income  of  the 
entity or legal arrangement, or, in the absence of any such individual, as having 
been made directly to, or secured for the immediate benefit of, any individual 
known  by  the  persons  in  charge  of  administering  the  entity  or  legal 
arrangement  as  having  directly  or  indirectly  contributed  to  the  assets  of  the 
entity or legal arrangement concerned.  

EN 

17 

   EN 

 
Those individuals shall then be treated as beneficial owners of the payment in 
accordance with Articles 2 and 3.  

This paragraph shall not apply if the entity or legal arrangement falls into one 
of the following cases: 

(a) 

(b) 

(c) 

(d) 

it  is  an  undertaking  for  collective  investment  or  other  collective 
investment  fund  or  scheme  whose  income  is  covered  by  points  (c)  and 
(d) of Article 6(1);  

it serves the management of the assets of a pension fund or an insurance 
business;  

it is acknowledged under the procedures applicable in the Member State 
where it is resident as serving exclusively charitable purposes;  

it  constitutes  a  shared  beneficial  ownership  for  which  the  economic 
operator making or securing the payment has established the identity and 
residence  of  all  the  beneficial  owners  in  accordance  with  Article  3  and 
therefore  acts  itself  as  paying  agent  in  accordance  with  paragraph  1  of 
this Article. 

The  categories  of  entities  and  legal  arrangements  which,  depending  on  the 
Member State where they have their place of effective management, shall in all 
cases  other  than  those  referred  to  in  points  (a)  to  (d)  be  considered  a  paying 
agent upon making an interest payment, or upon securing of such payment, are 
set out in Annex III. 

Any economic operator making an interest payment to, or securing an interest 
payment for, an entity or legal arrangement included in the list set out in Annex 
III  shall  communicate  to  the  competent  authority  of  its  Member  State  of 
establishment the name and place of effective management of the entity, or in 
the  case  of  a  legal  arrangement,  the  name  and  the  permanent  address  of  the 
person who primarily holds legal title and primarily manages the property and 
income  of  the  legal  arrangement,  and  the  total  amount  of  interest  paid  to,  or 
secured  for,  the  entity  or  legal  arrangement.  Where  the  place  of  effective 
management  of  the  entity  or  legal  arrangement  is  located  in  another  Member 
State, the competent authority shall pass this information on to the competent 
authority of that other Member State. 

3. 

Those  entities  and  legal  arrangements  referred  to  in  paragraph  2  to  whose 
assets or income no beneficial owner is immediately entitled at the moment of 
receipt  of  an  interest  payment  shall  have  the  option  of  being  treated  for  the 
purposes of this Directive as an undertaking for collective investment or other 
collective investment fund or scheme as referred to in point (a) of paragraph 2.  

Where an entity or legal arrangement exercises that option, the Member State 
in which it has its place of effective management shall issue a certificate to that 
effect.  The  entity  or  legal  arrangement  shall  present  that  certificate  to  the 
economic operator making or securing the interest payment. 

EN 

18 

   EN 

 
Member  States  shall  lay  down  the  detailed  rules  concerning  this  option  for 
entities and legal arrangements which have their place of effective management 
in  their  territory  and  shall  ensure  that  the  entity  or  legal  arrangement  having 
exercised this option acts as paying agent in accordance with paragraph 1, up to 
the  total  amount  of  the  interest  payments  received,  on  each  occasion  that  a 
beneficial owner becomes immediately entitled to its assets or income.” 

(4) 

Article 6 is replaced by the following: 

“Article 6 

Definition of interest payment 

1. 

For the purposes of this Directive, ‘interest payment’ means: 

(a) 

interest  paid  or  credited  to  an  account,  relating  to  debt  claims  of  every 
kind, whether or not secured by mortgage and whether or not carrying a 
right to participate in the debtor's profits, and, in particular, income from 
government  securities  and  income  from  bonds  or  debentures,  including 
premiums  and  prizes  attaching  to  such  securities,  bonds  or  debentures; 
penalty  charges  for  late  payments  shall  not  be  regarded  as  interest 
payments; 

(aa)  any income paid, or credited to an account, relating to securities of any 

kind under which the investor receives 

(i) 

a return on capital whose conditions are defined at the issuing date, 
and  

(ii) 

at the end of their term, at least 95% of the capital invested; 

(b) 

(c) 

interest  accrued  or  capitalised  at  the  sale,  refund  or  redemption  of  the 
debt claims referred to in point (a) and any income accrued or capitalised 
at the sale, refund or redemption of the securities referred to in point (aa); 

income deriving from payments referred to in points (a), (aa) or (b) either 
directly  or  through  an  entity  or  legal  arrangement  referred  to  in  Article 
4(2), distributed by any of the following: 

(i) 

for  collective 

investment  or  other  collective 
undertakings 
investment  funds  or  schemes  registered  in  accordance  with  the 
rules of any of the Member States; 

(ii) 

entities  or  legal  arrangements  having  exercised  the  option  under 
Article 4(3); 

(iii)  any  collective  investment  fund  or  scheme  established  outside  the 
territory  referred  to  in  Article  7,  irrespective  of  the  legal  form  of 
that  fund  or  scheme  and  of  any  restriction  to  a  limited  group  of 
investors of the purchase, sale or redemption of its shares or units; 

EN 

19 

   EN 

 
(d) 

income realised upon the sale, refund or redemption of shares or units in 
the  following  undertakings,  entities,  legal  arrangements,  investment 
funds  or  schemes,  if  they  invest,  directly  or  indirectly  via  other  such 
undertakings  or  entities  or  legal  arrangements  or  investment  funds  or 
schemes,  more  than  40%  of  their  assets  in  debt  claims  as  referred  to  in 
point (a) or in securities as referred to in point (aa):  

(i) 

for  collective 

undertakings 
investment  or  other  collective 
investment  funds  or  schemes  registered  in  accordance  with  the 
rules of any of the Member States; 

(ii) 

entities  or  legal  arrangements  having  exercised  the  option  under 
Article 4(3); 

(iii)  any  collective  investment  fund  or  scheme  established  outside  the 
territory  referred  to  in  Article 7,  irrespective  of  the  legal  form  of 
that  fund  or  scheme  and  of  any  restriction  to  a  limited  group  of 
investors of the purchase, sale or redemption of its shares or units; 

(e) 

benefits from a life insurance contract where the contract provides for a 
biometric risk coverage which, expressed as an average over the duration 
of  the  contract,  is  lower  than  5  %  of  the  capital  insured  and  its  actual 
performance is fully linked to interest or income of the kinds referred to 
in  points  (a),  (aa),  (b),  (c)  and  (d);  for  this  purpose  any  difference 
between  the  amounts  paid  out  pursuant  to  a  life  insurance  contract  and 
the sum of all the payments made to the life insurer under the same life 
insurance  contract  shall  be  considered  benefits  from  life  insurance 
contracts. 

However, Member States shall have the option of including income mentioned 
under point (d) in the definition of interest only to the extent that such income 
corresponds  to  gains  directly  or  indirectly  deriving  from  interest  payments 
within the meaning of points (a), (aa) and (b). Where a Member State exercises 
that  option,  it  shall  notify  the  Commission.  The  Commission  shall  publish  in 
the  Official  Journal  of  the  European  Union  the  fact  that  the  option  has  been 
exercised and, with effect from the date of such publication, the exercise of the 
option shall be binding on the other Member States.  

2.  As  regards  points  (c)  and  (d)  of  paragraph  1,  where  a  paying  agent  has  no 
information  concerning  the  proportion  of  the  income  which  derives  from 
interest payments within the meaning of points (a), (aa) or (b), the total amount 
of the income shall be considered an interest payment. 

3.  As regards point (d) of paragraph 1, where a paying agent has no information 
concerning the percentage of the assets invested in debt claims or the relevant 
securities, or in shares or units as defined in that point, that percentage shall be 
considered  to  be  above  40  %.  Where  he  cannot  determine  the  amount  of 
income  realised  by  the  beneficial  owner,  the  income  shall  be  deemed  to 
correspond  to  the  proceeds  of  the  sale,  refund  or  redemption  of  the  shares  or 
units. 

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20 

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4.  Where  an  interest  payment  as  defined  in  paragraph  1  is  made  to  an  entity  or 
legal arrangement referred to in Article 4(2) or credited to an account held by 
such an entity or legal arrangement, it shall be considered an interest payment 
by such entity or legal arrangement as long as that entity or legal arrangement 
has not exercised the option provided under Article 4(3). 

5.  As  regards  points  (b)  and  (d)  of  paragraph  1,  Member  States  shall  have  the 
option of requiring paying agents in their territory to annualise the interest or 
other  relevant  income  over  a  period  of  time  which  may  not  exceed  one  year, 
and of treating such annualised interest or other relevant income as an interest 
payment even if no sale, redemption or refund occurs during that period. 

6. 

By way of derogation from point (c) of paragraph 1, Member States shall have 
the  option  of  excluding  from  the  definition  of  interest  payment  any  income 
referred  to  in  that  provision  distributed  by  undertakings  or  entities  or  legal 
arrangements  established  within  their  territory  where  the  direct  or  indirect 
investment of such entities or legal arrangements in debt claims referred to in 
point (a) of paragraph 1 or in securities referred to in point (aa) of paragraph 1 
has not exceeded 15% of their assets.  

By way of derogation from paragraph 4, Member States shall have the option 
of  excluding  from  the  definition  of  interest  payment  in  paragraph 1  interest 
paid or credited to an account of an entity or legal arrangement referred to in 
Article  4(2)  which  has  not  exercised  the  option  under  Article  4(3)  and  is 
resident  within  their  territory,  where  the  direct  or  indirect  investment  of  such 
an  entity  or  legal  arrangement  in  debt  claims  referred  to  in  point  (a)  of 
paragraph  1  or  in  securities  referred  to  in  point  (aa)  of  paragraph  1  has  not 
exceeded 15% of its assets.  

Where a Member State exercises one or both of the options referred to in the 
first and second subparagraphs, it shall notify the Commission thereof. 

The Commission shall publish in the Official Journal of the European Union 
the  fact  that  the  option  has  been  exercised  and,  with  effect  from  the  date  of 
such  publication,  the  exercise  of  the  option  shall  be  binding  on  the  other 
Member States.  

7. 

8. 

The  percentage  referred  to  in  point  (d)  of  paragraph  1  and  paragraph  3  shall 
from 1 January 2011 be 25 %.  

The percentages referred to in point (d) of paragraph 1 and in paragraph 6 shall 
be determined by reference to the investment policy laid down in the fund rules 
or  instruments  of  incorporation  of  the  undertakings  or  entities  or  legal 
arrangements or investment funds or schemes concerned. 

Where  those  rules  or  instruments  do  not  define  an  investment  policy,  those 
percentages shall be determined by reference to the actual composition of the 
assets of the undertakings or entities or legal arrangements or investment funds 
or schemes concerned, as resulting from the average of assets at the beginning 
and  the  end  of  their  last  accounting  period  before  the  date  when  the  interest 
payment is made or secured by the paying  agent to the beneficial owner.  For 

EN 

21 

   EN 

 
newly constituted undertakings or entities or legal arrangements or investment 
funds,  or  schemes,  such  actual  composition  shall  result  from  the  average  of 
assets at the beginning of the current  accounting period and at the  end  of the 
last month preceding the date on which the interest payment is made or secured 
by the paying agent to the beneficial owner. 

The  composition  of  the  assets,  measured  in  accordance  with  the  rules 
applicable in the Member State where an undertaking for collective investment 
or other collective investment fund or scheme is registered, shall be binding on 
the other Member States. 

9. 

Income  referred  to  in  point  (aa)  of  paragraph  1  shall  be  considered  to  be  an 
interest  payment  only  to  the  extent  to  which  the  securities  producing  that 
income were first issued on or after 1 December 2008. 

10.  Benefits  from  life  insurance  contracts  shall  be  considered  to  be  an  interest 
payment  in  accordance  with  point  (e)  of  paragraph  1  only  to  the  extent  to 
which  the  life  insurance  contracts  giving  rise  to  such  benefits  were  first 
subscribed on or after 1 December 2008.” 

(5) 

Article 8 is replaced by the following: 

“Article 8 

Information reporting by the paying agent 

1.  Where  the  beneficial  owner  is  resident  in  a  Member  State  other  than  that  in 
which the paying agent is established, the minimum amount of information to 
be reported by the paying agent to the competent authority of its Member State 
of establishment shall consist of: 

(a) 

the  identity  and  residence  of  the  beneficial  owner  established  in 
accordance with Article 3 or, in cases of shared beneficial ownership, the 
identity and residence of all beneficial owners who fall within the scope 
of Article 1(1);  

(b) 

the name and address of the paying agent; 

(c) 

the  account  number  of  the  beneficial  owner  or,  where  there  is  none, 
identification of the debt claim giving rise to the interest payment or of 
the  life  insurance  contract,  security  or  share  or  unit  giving  rise  to  that 
payment; 

(d) 

information  concerning 
paragraph 2. 

the 

interest  payment 

in  accordance  with 

2. 

The  minimum  amount  of  information  concerning  interest  payment  to  be 
reported by the paying agent shall distinguish between the following categories 
of the interest payment and indicate: 

(a) 

in  the  case  of  an  interest  payment  within  the  meaning  of  point  (a)  of 
Article 6(1): the amount of interest paid or credited; 

EN 

22 

   EN 

 
(aa)  in  the  case  of  an  interest  payment  within  the  meaning  of  point  (aa)  of 

Article 6(1): the amount of any income paid or credited; 

(b) 

(c) 

in the case of an interest payment within the meaning of points (b) or (d) 
of  Article  6(1):  either  the  amount  of  interest  or  income  referred  to  in 
those points or the full amount of the proceeds from the sale, redemption 
or  refund;  the  paying  agent  shall  inform  the  competent  authority  of  its 
Member  State  of  establishment  when  it  reports  the  full  amount  of  the 
proceeds from the sale, redemption or refund;  

in  the  case  of  an  interest  payment  within  the  meaning  of  point  (c)  of 
Article 6(1): either the amount of income referred to in that point or the 
full amount of the distribution; the paying agent shall specifically inform 
the  competent  authority  of  its  Member  State  of  establishment  when  it 
reports the full amount of the distribution; 

(d) 

in the case of an interest payment within the meaning of Article 6(4): the 
amount of income attributable to each of the beneficial owners who fall 
within the scope of Article 1(1);  

(e)  where  a  Member  State  exercises  the  option  under  Article  6(5):  the 

amount of annualised interest or other relevant income; 

(f) 

in  the  case  of  an  interest  payment  within  the  meaning  of  point  (e)  of 
Article 6(1): the benefit calculated in accordance with that provision. 

3. 

In  cases  of  shared  beneficial  ownership,  the  paying  agent  shall  inform  the 
competent authority of its Member State of establishment whether the amount 
reported  for  each  beneficial  owner  is  the  full  amount  paid  to  the  beneficial 
owners  collectively,  the  actual  share  pertaining  to  the  beneficial  owner 
concerned or an equal share.  

4.  Notwithstanding  paragraph  2,  Member  States  may  allow  paying  agents  to 

report only the following:  

(a) 

(b) 

(c) 

in the case of interest payments within the meaning of points (a), (aa) and 
(c) of Article 6(1), the total amount of interest or income;  

in the case of interest payments within the meaning of points (b) and (d) 
of Article 6(1), the total amount of the proceeds from sale, redemption or 
refund related to such payments;  

in the case of interest payments within the meaning of point (e) of Article 
6(1), the total amount paid out under a life insurance contracts generating 
such payments. 

The  paying  agent  shall  state  whether  the  amount  reported  is  an  amount  of 
interest or income or a total amount of the proceeds from sale, redemption or 
refund or a total amount paid out under life insurance contracts.”  

(6) 

Article 11 is amended as follows: 

EN 

23 

   EN 

 
(a)  Paragraph 2 is replaced by the following: 

“2.  The paying agent shall levy withholding tax as follows: 

(a) 

in the case of an interest payment within the meaning of point (a) 
of Article 6(1): on the amount of interest paid or credited; 

(aa) 

in the case of an interest payment within the meaning of point (aa) 
of Article 6(1): the amount of any income paid or credited; 

(b) 

(c) 

(d) 

in the case of an interest payment within the meaning of point (b) 
or (d) of Article 6(1) on the amount of interest or income referred 
to in those points or by a levy of equivalent effect to be borne by 
the  recipient  on  the  full  amount  of  the  proceeds  of  the  sale, 
redemption or refund; 

in the case of an interest payment within the meaning of point (c) 
of Article 6(1): on the amount of income referred to in that point; 

in  the  case  of  an  interest  payment  within  the  meaning  of  Article 
6(4): on the amount of income attributable to each of the beneficial 
owners who fall within the scope of Article 1(1);  

(e)  where a Member State exercises the option under Article 6(5): on 
the amount of annualised interest or other relevant income;  

(f) 

in the case of an interest payment within the meaning of point (e) 
of  Article  6(1):  the  benefit  calculated  in  accordance  with  that 
provision. 

When  transferring  the  revenue  of  the  withholding  tax  to  the  competent 
authorities of its Member State of establishment, the paying agent shall inform 
them  of  the  number  of  beneficial  owners  concerned  by  the  levying  of  the 
withholding  tax  classified  according  to  their  respective  Member  States  of 
residence.”  

(b)  Paragraph 5 is replaced by the following: 

“5.  During  the  transitional  period,  Member  States  levying  withholding  tax 
may provide that an economic operator making an interest payment to, or 
securing such a payment for, an entity or legal arrangement referred to in 
Article  4(2)  which  has  its  place  of  effective  management  in  another 
Member State and which is of a type listed in Annex III for that Member 
State, shall be considered the paying agent in place of the entity or legal 
arrangement and shall levy the withholding tax on that income, unless the 
entity or legal arrangement has formally agreed to its name, address and 
the  total  amount  of  income  paid  to  it  or  secured  for  it  being 
communicated  in  accordance  with  the  seventh  subparagraph  of  Article 
4(2).  In  the  case  of  legal  arrangements  the  name  and  address  to  be 
communicated shall be those of the person who primarily holds legal title 
and primarily manages their property and income.”  

EN 

24 

   EN 

 
(7) 

Article 13 is replaced by the following: 

“Article 13 

Exception to the withholding tax procedure 

Member  States  levying  withholding  tax  in  accordance  with  Article  11  shall 
ensure  that  a  beneficial  owner  may  request  that  no  tax  be  withheld  when  he 
expressly authorises the paying agent to report information in accordance with 
Chapter  II,  such  authorisation  covering  all  interest  payments  made  to  the 
beneficial owner by that paying agent. 

In such a case, Article 9 shall apply. ”  

(8) 

Article 14 is amended as follows: 

(a) 

in paragraph 2, the first sentence is replaced by the following: 

“If  an  interest  payment  received  by  a  beneficial  owner  has  been  subject  to 
withholding tax in the Member State of the paying agent, the Member State of 
residence for tax purposes of the beneficial owner shall grant him a tax credit 
equal to the amount of the tax withheld in accordance with its national law.” 

(b)  paragraph 3 is replaced by the following: 

“3. 

If, in addition to the withholding tax referred to in Article 11, an interest 
payment  received  by  a  beneficial  owner  has  been  subject  to  any  other 
type  of  withholding  tax  and  the  Member  State  of  residence  for  tax 
purposes grants a tax credit for such withholding tax in accordance with 
its  national  law  or  double  taxation  conventions,  such  other  withholding 
tax shall be credited before the procedure in paragraph 2 is applied.” 

(9) 

In the second subparagraph of Article 15(1), “the Annex” is replaced by “Annex IV”. 

(10) 

The first sentence of Article 18 is replaced by the following: 

“The Commission shall report to the Council every three years on the operation 
of this Directive on the basis of the statistics listed in Annex V, which shall be 
provided by each Member State to the Commission.” 

(11) 

The following Articles 18a and 18b are inserted: 

“Article 18a 

Implementing measures 

The  Commission  may,  acting  in  accordance  with  the  procedure  referred  to  in 
Article 18b(2), adopt measures for the following purposes: 

(1)  updating and supplementing the Annexes; 

(2)  determining  the  kind  of  information  to  be  contained  in  any  central 
register of the identity and residence of beneficial owners which may be 

EN 

25 

   EN 

 
maintained  by  a  paying  agent  having  activities  in  different  Member 
States; 

(3)  determining  the  documents  which  may  be  used,  for  the  purposes  of 
Article 3, by the paying agent for establishing the identity and residence 
of beneficial owners; 

(4) 

(5) 

(6) 

specifying  the  data  providers  which  may  be  used  by  paying  agents  for 
obtaining  the  information  necessary  for  the  proper  treatment,  for  the 
purposes  of  Article  6,  of  income  deriving  from  undertakings  for 
collective investment or other collective investment funds or schemes or 
specific securities;.  

establishing  common  formats  and  operational  procedures  for  the 
exchange of information referred to in Article 9; 

establishing  common  forms  for  the  certificates  and  other  documents 
which  are  needed  for,  or  facilitate,  the  correct  application  of  this 
Directive,  in  particular  the  certificate  referred  to  in  the  second 
subparagraph of Article 4(3) and the documents issued in Member States 
levying withholding tax, which are used for the purposes of Article 14 by 
the Member State of residence for tax purposes of the beneficial owner. 

Article 18b 

Committee 

1. 

The  Commission  shall  be  assisted  by  the  Committee  on  Administrative 
Cooperation for Taxation, hereinafter referred to as “the Committee”. 

2.  Where  reference  is  made  to  this  paragraph,  Articles  5  and  7  of  Decision 

99/468/EC shall apply. 

The  period  laid  down  in  Article  5(6)  of  Decision  99/468/EC  shall  be  set  at 
three months. 

3. 

The  Committee  may,  in  addition  to  its  tasks  under  paragraph  1,  examine  the 
matters raised by its chairman, either on his own initiative or at the request of 
the  representative  of  a  Member  State,  concerning  the  application  of  this 
Directive.” 

(12) 

The Annex is amended in accordance with the Annex to this Directive.  

Article 2 

1. 

Member States shall adopt and publish, by […] at the latest, the laws, regulations and 
administrative  provisions  necessary  to  comply  with  this  Directive.  They  shall 
forthwith  communicate  to  the  Commission  the  text  of  those  provisions  and  a 
correlation table between those provisions and this Directive. 

EN 

26 

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They  shall  apply  those  provisions  from  [the  first  day  of  the  third  calendar  year 

following the calendar year in which this Directive enters into force]. 

When  Member  States  adopt  those  provisions,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their 
official publication. Member States shall determine how such reference is to be 
made. 

2. 

Member States shall communicate to the Commission the text of the main provisions 
of national law which they adopt in the field covered by this Directive. 

This Directive shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

Article 3 

Article 4 

This Directive is addressed to the Member States. 

Done at Brussels,  

For the Council 

EN 

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ANNEX 

The Annex to Directive 2003/48/EC is amended as follows: 

(1) 

(2) 

The Annex becomes Annex IV. 

Annexes I, II and III are inserted as follows: 

“ANNEX I 

List of legal forms of entities and legal arrangements to which Article 2(3) applies because of 
the presence within the territory of specific countries or jurisdictions of their place of effective 
management 

1. 

Entities and legal arrangements whose place of effective management is in a country 
or jurisdiction outside the territorial scope of the Directive as defined in Article 7 and 
which is different from those listed in Article 17(2):  

Antigua and Barbuda 

International business company 

The Bahamas 

Bahrain 

Barbados 

Belize 

Bermuda 

Brunei 

Cook Islands 

Costa Rica 

Djibouti 

Dominica 

Trust 
Foundation 
International business company 

Financial trust 

Trust 

Trust 
International business company 

Trust 

Trust 
International business company 
International trust 
International Limited Partnership 

Trust 
International trust 
International company 
International partnership 

Trust 

Exempt company 
(Foreign) trust 

Trust 
International business company 

EN 

28 

   EN 

 
Fiji 

French Polynesia 

Guam 

Guatemala 

Hong Kong 

Kiribati 

Labuan (Malaysia) 

Lebanon 

Macao 

Maldives 

Northern Marianas Islands 

Marshall Islands 

Mauritius 

Trust 

Société (Company) 
Société de personnes (Partnership) 
Société en participation (Joint venture) 
(Foreign) trust 

Company 
Sole proprietorship 
Partnership 
(Foreign) trust 

Trust 
Fundación (Foundation) 

Trust 

Trust 

Offshore company 
Malaysian offshore bank, 
Offshore limited partnership 
Offshore trust 

Companies  benefiting  from  the  Offshore 
company regime 

Trust 
Fundação (Foundation) 

All  the  companies,  partnership  and  Foreign 
trust 

Foreign sales corporation 
Offshore banking corporation 
(Foreign) trust 

Trust 

Trust 
Global business company cat. 1 and 2 

EN 

29 

   EN 

 
Micronesia 

Nauru 

New Caledonia 

Niue 

Panama 

Palau 

Philippines 

Puerto Rico 

Saint Kitts and Nevis 

Company 
Partnership 
(Foreign) trust 

Trusts/nominee company 
Company 
Partnership 
Sole proprietorship 
Foreign will 
Foreign estate 
Other  form  of  business  negotiated  with  the 
Government 

Société (Company) 
Société civile (Civil company) 
Société de personnes (Partnership) 
Joint venture 
Estate of deceased person 
(Foreign) trust 

Trust 
International business company 

Fideicomiso (Trust) 
Fundación de interés privado (Foundation) 

Company 
Partnership 
Sole proprietorship 
Representative office 
Credit union (financial cooperative) 
Cooperative 
(Foreign) trust 

Trust 

Estate 
Trust 
International banking entity 

Trust 
Foundation 
Exempt company 

Saint Lucia 

Saint Vincent and the Grenadine 

Trust 

Trust 

Samoa 

Trust 
International trust 
International company 

EN 

30 

   EN 

 
Seychelles 

Singapore 

Solomon Islands 

South Africa 

Tonga 

Tuvalu 

Offshore bank 
Offshore insurance company 
International partnership 
Limited partnership 

Trust 
International business company 

Trust 

Company 
Partnership 
Trust 

Trust 

Trust 

Trust 
Provident fund 

United Arab Emirates 

Trust 

US Virgin Islands 

Uruguay 

Vanuatu 

Trust 
Exempt company 

Trust 

Trust 
Exempt company 
International company 

2. 

Entities and legal arrangements whose place of effective management is in a country 
or  jurisdiction  listed  in  Article  17(2),  to  which  Article  2(3)  applies  pending  the 
adoption by the country or jurisdiction concerned of provisions equivalent to those of 
Article 4 (2): 

Andorra 

Anguilla 

Aruba 

Trust 

Trust 

Stichting (Foundation) 
Companies  benefiting  from 
company regime 

the  offshore 

EN 

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   EN 

 
 
British Virgin Islands 

Cayman Islands 

Guernsey 

Isle of Man 

Jersey 

Liechtenstein 

Monaco 

Montserrat 

Netherlands Antilles 

San Marino 

Switzerland 

Turks and Caicos 

Trust 
International business company 

Trust 
Exempt company 

Trust 
Zero tax company 

Trust 

Trust 

Anstalt (Trust) 
Stiftung (Foundation) 

Trust 
Fondation (Foundation) 

Trust 

Trust 
Stichting (Foundation) 

Trust 
Fondazione (Foundation) 

Trust 
Foundation 

Exempted company 
Limited partnership 
Trust 

EN 

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   EN 

 
 
ANNEX II 

List of Member States attributing a tax identification number, at least on request, to any 
individual who is resident for tax purposes within their territory,  
regardless of his or her nationality 

MEMBER 
STATE 

STRUCTURE 

FORMAT 

BE - Belgium  YYMMDD XXX XX 

1 block of 11 digits. The first 6 
denote  the  date  of  birth,  the 
following  3  are  an  order 
number  and  the  last  2  are  a 
control key. 

AVAILABILITY 
of TIN in official 
documentation 

National ID card 

Passport 

BG 
Bulgaria 

- 

9999999999 

1 block of 10 digits. The last is 
a scheduled figure. 

National ID card 

CZ  -  Czech 
Republic 

999999999 

9999999999 

DK 
Denmark 

- 

DDMMYY-9999 

DE-Germany  999999999999 

Known  as  the  'Unified  Civil 
Number' 

1  block  of  9  or  10  digits.  The 
sixth  and  seventh  digits  may 
be separated by a slash. 

Passport 

National ID card 

Passport  

Driving licence 

1  block  of  10  digits,  with  a 
dash between the sixth and the 
seventh digits. 

Passport  

1 block of maximum 12 digits. 
The digits may be separated by 
slashes. 

N12 

EE - Estonia 

99999999999 

1 block of 11 digits. 

National ID card 

IE - Ireland 

9999999L(W) 

Passport 

Driving licence 

from 
of 

Document 
the  Office 
Revenue 
Commissioners 

7 digits followed by either 1 or 
2  letters.  If  there  are  2  letters, 
the second is a 'W'. The first is 
a check letter calculated by an 
algorithm. 

12 

TIN may change if a person changes domicile. 

EN 

33 

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EL Greece 

999999999 

1  block  of  9  digits,  8  'normal' 
and 1 'check digit'. 

N 

from 
Document 
the  Office 
of 
Social  and  Family 
Affairs 

National ID card 

Passport 

ES - Spain 

1) 99999999A 

2) X9999999A 

M0000001A  

L0000001A 

K0000001A 

3) E99999999 

G99999999 

H99999999 

Spanish 

nationals 

1) The standard TIN belonging 
is 
to 
composed  of  9  characters  : 
digits 
- 
letter 
- 

check 

one 

8 

2)  Other  TINs  belonging  to 
specific  types  of  individuals 
and  to  foreign  citizens  with  a 
identity  card  are 
Spanish 
composed  of  a  string  of  9 
characters: 
- 1 letter describing the type of 
individual 
- 
- 1 check letter. 

digits 

7 

3) For residual entities, the 
TIN is composed of: 
- 1 letter: E, G or H. 
- 7 digits 
- 1 final check digit  

IT - Italy 

LLLLLL99L99L999L 

The tax number for individuals 
is an alphanumeric block of 16 
characters.  

Health card 

Tax code card 

CY - Cyprus 

99999999L 

1 block of 8 digits and 1 letter. 
The 
is 
the  end 
calculated as a check letter. 

letter  at 

N 

LV - Latvia 

DDMMYY99999 

"9"9999999999 

block 

1 
digits 
of 
(DDMMYY:  date  of  birth) 

11 

Passport 
Driving licence 

1  block  of  11  digits  (the  first 
is 
digit 
'9') 
always 
to  natural  persons, 
Granted 
have  TIN 
do 
who 
'DDMMYY99999'. 

not 

EN 

34 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LT 
Lithuania 

- 

99999999999 

1 block of 11 digits.  

National ID card 

9999999999 

Passport 

The  10-digit  TIN 
for 
individuals,  who  don’t  have 
the 11-digit TIN. 

is 

HU 
Hungary 

– 

99999999 

The TIN for individuals is 1 
block of 10 digits. 

N 

MT - Malta 

999L 

999999999 

The company code is a block 
of 8 digits. 

The  TIN  is  the  individual's 
identity card number. Between 
3  and  7  digits  +  letter  (M,  G, 
A, P, L, H, B or Z). 

National ID card 

Passport13 

Persons  with  no  Maltese 
identity  card  will  be  issued  a 
TIN  by  the  Inland  Revenue 
Department.  This  is  a  9-digit 
number  with  the  last  2  digits 
check  digits.  Such 
being 
persons  may  apply  for  an  ID 
card  with 
respective 
the 
authority.  Once  it  is  issued,  it 
will be used as the TIN, as it is 
for Maltese residents. 

1 block of 8 or 9 digits. If the 
TIN  consists  of  8  digits,  you 
must place a "0" in front of it. 

1 block of 9 digits with the last 
as check digit. 

1  block  of  10  digits  with  the 
last 
an 
algorithm, as a check digit. 

calculated 

using 

National ID card 

Passport 

Driving Licence 
N15 

N 

NL 
Netherlands 

- 

999999999 

AT - Austria   99999999914 

PL - Poland 

9999999999 

PT - Portugal  999999999 

1 block of 9 digits with the last 
calculated  using  an  algorithm, 

N 

13 
14 

15 

In MT, non-residents receive an ID number, which is stated on bank statements. 
'9' denotes a digit; 
'L' denotes a letter; 
'DDMMYY' denotes a date (day, month, year) 
TIN can change when a person changes its domicile. 

EN 

35 

   EN 

 
 
 
 
 
                                                 
as a check digit. 

RO 
Romania 

- 

9999999999999 

1 block of 13 digits. The check 
digit  is  calculated  using  an 
algorithm. 

National ID card 

Passport 

SI - Slovenia  99999999 

1  block  of  a  random  8-digit 
number  (first  digit  cannot  be 
0). The eighth digit is a control 
number. 

SK 
Slovakia 

- 

9999999999 

1 block of 10 digits 

FI - Finland 

DDMMYY(+,-,A) 999 (L/9) 

9999999-9 

SE - Sweden  YYMMDD-NNNX 

1  block  of  11  characters  as 
follows:  

Date of birth DDMMYY 

Character (+, -, A) 

Individual number 999 

Checking character L/9 

The  company  code  is  a  block 
of  7  digits,  and  1  check  letter 
(9999999-L) where 9999999 is 
the  serial  number  and  L  is  the 
check letter. 

YYMMDD is the date of birth; 
NNN is a birth number; X is a 
check  digit.  The  birth  number 
is  odd  for  men  and  even  for 
women.  The  check  digit  is 
calculated automatically on the 
basis  of  the  date  of  birth  and 
the birth number. 

N 

N 

National ID card 

Passport 
Driving licence16 

National ID card 

Passport 

Driving licence 

UK  -  United 
Kingdom 

UTR: 99999 99999 

The  UK  has  no  TIN  but  2 
quasi TINs as follows: 

Passport 

NINO: 
LL999999(A/B/C/D/space) 

1. The UTR (Unique Taxpayer 
Reference) whose usual format 
is  11  characters  in  the  format 
1-5  numeric,  6  space,  7-11 
numeric. 

2.  The  NINO 

(National 

16 

TIN in National ID Card and Passport is quite cryptic, but it clearly appears in the driving license. Self-
employed people may have a second TIN. 

EN 

36 

   EN 

 
 
 
 
                                                 
Insurance  Number)  whose 
usual  format  is  9  characters: 
position  1&2  are  letters  (but 
not D, F, I, O, Q, U or V or the 
combinations  FY,  GB,  NK  or 
TN)  3  to  8  numbers,  and  a 
final character A, B, C, D, or a 
space. 

EN 

37 

   EN 

 
ANNEX III 

List of "paying agents on receipt" under Article 4(2) 

INTRODUCTORY NOTE 

Trusts and similar legal arrangements are listed for those Member States that do not have a 
domestic  fiscal  regime  for  the  taxation  of  income  received  on  behalf  of  such  legal 
arrangements by the person who primarily holds legal title and primarily manages its property 
and  income,  and  is  resident  on  their  territory.  This  list  refers  to  trusts  and  similar  legal 
arrangements  whose  place  of  effective  management  of  their  movable  assets  is  in  these 
countries (residence of the main trustee or other administrator responsible for movable assets), 
irrespective of the laws under which these trusts and similar legal arrangements have been set 
up. 

Countries 

List of entities and 
arrangements 

Comments 

Belgium 

- Société de droit commun / 
maatschap (Civil law or 
commercial company without 
any legal status) 

See Articles 46, 47 and 48 of the 
Belgian Company Code. 

- Société momentanée / tijdelijke 

handelsvennootschap (Company 
without any legal status whose 
purpose is to deal with one or 
several specific commercial 
operations) 

These ‘companies’ (the name of 
which is given in French and Dutch) 
do not have legal status, and from the 
point of view of taxation, a look-
through approach is applicable. 

- Société interne / stille 

handelsvennootschap (Company 
without any legal status through 
which one or more persons has 
(have) an interest in operations 
that one or more other persons 
manage(s) on their behalf) 

- ‘Trust’ or other similar legal 

arrangement 

Bulgaria 

- Drujestvo sys specialna 

investicionna cel (Special-
purpose investment company) 

Entity exempt from corporate income 
tax  

EN 

38 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trusts are allowed for public offering 
in Bulgaria and are exempt from 
corporate income tax 

Czech Republic 

-Investicionno drujestvo 

(Investment company, not 
covered by Article 6) 

- ‘Trust’ or other similar legal 

arrangement  

- Veřejná obchodní společnost 
(ver. obch. spol. or V.O.S.) 
(Partnership) 

- Sdruženi (Association) 

- Družstvo (Cooperative) 

- Evropské hospodářské 

zájmové sdružení (EHZS) 
(European Economic Interest 
Grouping (EEIG )) 

- ‘Trust’ or other similar legal 

arrangement 

Denmark 

- Interessentskaber (General 

partnership) 

- Kommanditselskaber (Limited 

partnership) 

- Partnerselskaber (Partner 

company) 

- Europæisk økonomisk 
firmagrupper (EØFG) 
(European Economic Interest 
Grouping (EEIG)) 

- ‘Trust’ or other similar legal 

arrangement 

Germany 

- Gesellschaft bürgerlichen 

Rechts (Civil law company) 

- Kommanditgesellschaft — KG, 

EN 

39 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
offene Handelsgesellschaft — 
OHG (Commercial partnership) 

- Europäische Wirtschaftliche 

Interessenvereinigung 
(European Economic Interest 
Grouping (EEIG)) 

Estonia 

- Täisühing- TÜ (General 

partnership) 

- Usaldusühing-UÜ (Limited 

partnership) 

General and limited partnerships are 
taxed as separate taxable entities, any 
distributions by which are deemed to 
be dividends (subject to distribution 
tax) 

- ‘Trust’ or other similar legal 

arrangement 

Ireland 

- Partnership and investment club 

Irish resident trustee taxable on 
income arising to the trust. 

-  European  economic 
grouping (EEIG) 

interest 

Greece 

- Omorrythmos Eteria (OE) 
(General partnership) 

Partnerships are subject to corporate 
income tax. However, up to 50% of 
the profits of partnerships is taxed in 
the hands of the individual partners 
at their personal tax rate 

-  Eterorythmos  Eteria 
(Limited partnership) 

(EE) 

-  ‘Trust’  or  other  similar  legal 

arrangement 

Spain 

Entities  subject  to  the  system  for 
taxing attribution of profits: 

- Sociedad civil con o sin 

personalidad jurídica (Civil law 
partnership with or without legal 

EN 

40 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
personality), 

- Agrupación europea de interés 
económico (AEIE) (European 
Economic Interest Grouping 
(EEIG)), 

- Herencias yacentes (Estate of a 

deceased person), 

- Comunidad de bienes (Joint 

ownership). 

- Other entities without legal 
personality that constitute a 
separate economic unit or a 
separate group of assets (Article 
35(4) of the Ley General 
Tributaria). 

- ‘Trust’ or other similar legal 

arrangement 

France 

- Société en participation (Joint 

venture company) 

- Société ou association de fait 

(De facto company) 

- Indivision (Joint ownership) 

- ‘Trust’ or other similar legal 

arrangement 

EN 

41 

   EN 

 
 
 
 
 
 
 
 
 
 
The category of entities treated as 
‘società semplici’ includes: ‘società 
di fatto’ (irregular or ‘de facto’ 
partnerships), which do not have 
commercial activities as their 
purpose, and ‘associazioni’ 
(associations) organised by artists or 
professional persons for the practice 
of their art or profession in 
associative forms with no legal 
personality 

The category of non-commercial 
entities without legal personality is 
wide, and may include various types 
of organisations: associations, 
syndicates, committees, non-profit 
organisations and others 

Trusts created under Cypriot 
jurisdiction are considered 
transparent entities under national 
law. 

Italy 

- Società semplice (Civil law 
partnership and assimilated 
entity) 

- Non-commercial entity without 

legal personality 

- ‘Trust’ or other similar legal 

arrangement 

Cyprus 

- Syneterismos (Partnership) 

Latvia 

- syndesmos or somatio 

(Association) 

- Synergatikes (Cooperative) 

- ‘Trust’ or other similar legal 

arrangement  

- Ekswxwria Eteria (Offshore 

company)  

- Pilnsabiedrība (General 

partnership) 

- Komandītsabiedrība (Limited 

partnership) 

- Eiropas Ekonomisko interešu 
grupām (EEIG) (European 
Economic Interest Grouping 
(EEIG) 

- Biedrības un nodibinājumi 

(Association and foundation); 

- Lauksaimniecības kooperatīvi 

(Agriculture cooperative) 

- ‘Trust’ or other similar legal 

arrangement 

EN 

42 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lithuania 

- Europos ekonominių interesų 

grupės (European Economic 

Interest Grouping (EEIG)) 

- Asociacija (Association) 

Interests and capital gains on shares 
or bonds derived by associations are 
exempt from corporate income tax. 

- ‘Trust’ or other similar legal 

arrangement 

Luxembourg 

- Société en nom collectif 
(General partnership) 

- Société en commandite simple 

(Limited partnership) 

- ‘Trust’ or other similar legal 

arrangement 

Hungary 

-  ‘Trust’  or  other  similar  legal 

arrangement 

Hungary recognises trusts as 
‘entities’ under national rules  

Partnerships “en commandite” the 
capital of which is divided into 
shares are subject to general CIT. 

Malta 

- Soċjetà in akomonditia 

(Partnership “en commandite”), 
the capital of which is not 
divided into shares 

- Arrangement in participation 

(Association “en participation”) 

- Investment club  

- Soċjetà Kooperattiva 
(Cooperative society)  

The Netherlands 

- Vennootschap onder firma 

(General partnership) 

General partnerships, closed 
partnerships and EEIGs are 
transparent for tax purposes. 

- Commanditaire vennootschap 
(Closed limited partnership) 

- Europese economische 

samenwerkingsverbanden 
(EESV) (European Economic 
Interest Grouping (EEIG)) 

EN 

43 

   EN 

 
 
 
  
 
 
 
 
 
 
 
 
- Vereniging (Association) 

- Stichting (Foundation) 

- ‘Trust’ or other similar legal 

arrangement 

Verenigingen (Associations) and 
stichtingen (foundations) are tax 
exempt unless they carry on a trade 
or business. 

Austria 

- Personengesellschaft 

(Partnership) 

Partnership is considered transparent, 
even if viewed as an entity for the 
purpose of profit computation. 

- Offene Personengesellschaft 

(General commercial 
partnership) 

- Kommanditgesellschaft, KG 

(Limited partnership) 

- Gesellschaft nach bürgerlichem 

Recht, GesBR (Civil law 
partnership) 

- Offene Erwerbsgeselllschaft 
(OEG) (Professional general 
partnership) 

- Kommandit-Erwerbsgesellschaft 

(Professional limited 
partnership) 

- Stille Gesellschaft (Silent 

partnership) 

- Einzelfirma (Sole partnership) 

- Wirtschaftliche 

Interessenvereinigung 
(European Economic Interest 
Grouping (EEIG)) 

Treated like a normal ‘partnership’ 

- Privatstiftung (Private 

foundation) 

Taxed as a company, interest income 
taxed at a reduced rate of 12.5% 

- ‘Trust’ or other similar legal 

arrangement 

Poland 

- Spólka jawna (Sp. j.) (General 

partnership) 

EN 

44 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Portugal 

- Spólka komandytowa (Sp. k.) 

(Limited partnership) 

- Spólka komandytowo-akcyjna 
(S.K.A.) (Limited joint-stock 
partnership) 

- Spólka partnerska (Sp. p.) 
(Professional partnership) 

- Europejskie ugrupowanie 
interesów gospodarczych 
(EUIG) (European Economic 
Interest Grouping (EEIG)) 

- ‘Trust’ or other similar legal 

arrangement 

- Sociedade civil (Civil law 
partnership) which is not 
incorporated in a commercial 
form 

- Incorporated firms engaged in 
listed professional activities in 
which all partners are 
individuals qualified in the same 
profession 

- Agrupamento de Interesse 

Económico (AIE) (domestic 
economic interest grouping ) 

- Agrupamento Europeu de 

Interesse Económico (AEIE) 
(European Economic Interest 
Grouping (EEIG)) 

- Sociedada gestora de 

participacoes sociais (SGPS) 
(Holding companies which are 
either controlled by a family 
group or fully owned by five 

Civil law partnerships not 
incorporated in a commercial form, 
incorporated firms engaged in listed 
professional activities, ACE (type of 
incorporated joint venture), EEIGs 
and companies holding assets which 
are either controlled by a family 
group or fully owned by five 
members or less are fiscally 
transparent. 

Other incorporated partnerships are 
treated as companies and taxed under 
the general IRC rules. 

EN 

45 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
members or less) 

- Herança jacente (namely estate 

of a deceased person) 

- Unincorporated association  

- Offshore company operating in 

free-trade zones in Madeira or in 
Azores island of Santa Maria 

Offshore companies operating in 
free-trade zones in Madeira or in 
Azores island of Santa Maria are 
exempted from CIT and WHT on 
dividends, interest, royalties and 
similar payments made to the foreign 
parent. 

-  ‘Trust’  or  other  similar  legal 

arrangement 

The only trusts admitted under 
Portuguese law are those set up 
under foreign law by legal persons in 
the International Business Centre of 
Madeira and trust assets constitute an 
autonomous part of the patrimony of 
the legal person acting as trustee. 

Romania 

- Association (partnership) 

- Cooperative (Cooperative) 

- ‘Trust’ or other similar legal 

arrangement 

Slovenia 

Slovak Republic 

podjetnik 

Samostojni 

- 
(Proprietorship) 
-  ‘Trust’  or  other  similar  legal 
arrangement 
- Verejná obchodná spoločnosť 

(General partnership) 

- Európske združenie 

hospodárskych záujmov 
(European Economic interest 
grouping (EEIG)) 

- Komanditná spoločnosť 

(Limited partnership) re income 
attributed to a general partner 

The taxable base is first computed 
for the limited partnership as a whole 
and then allocated to the general 
partners and limited partners. The 
profit shares received by the general 

EN 

46 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
partners of a limited partnership are 
taxed at the level of general partners. 
The remainder income of the limited 
partners is taxed initially at 
partnership level according to the 
rules for companies. 

- Združenie (Association) 

- Entities that are not set up for 
the purpose of conducting 
business: chambers of 
professionals, voluntary civic 
associations, Nadácia 
(foundations) 

- ‘Trust’ or other similar legal 

arrangement 

Tax-exempt income includes income 
derived from activities that are the 
purpose of the establishment of the 
organisation, except income subject 
to the WHT regime. 

Finland 

- yksityisliike (Unregistered firm) 

- avoin yhtiö / öppet bolag 
(Partnership) 

- kommandiittiyhtiö / 
kommanditbolag (Limited 
partnership) 

- kuolinpesä / dödsbo (Estate of a 

deceased person) 

- eurooppalaisesta taloudellisesta 

etuyhtymästä (ETEY) / 
europeiska ekonomiska 
intressegrupperingar (European 
Economic interest grouping 
(EEIG)) 

- ‘Trust’ or other similar legal 

arrangement 

EN 

47 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sweden 

- handelsbolag (General 

partnership) 

- kommanditbolag (Limited 

partnership) 

- enkelt bolag (Simple 

partnership) 

- ‘Trust’ or other similar legal 

arrangement 

UK 

- General partnership 

- Limited partnership 

- Limited liability partnership 

- EEIG 

- Investment club (where 

members are entitled to a 
specific share of assets) 

General partnerships, limited 
partnerships; limited liability 
partnerships and EEIGs are 
transparent for tax purposes. 

EN 

48 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(3) 

Annex V is added as follows: 

"ANNEX V 

List of items for statistical purposes to be yearly provided 
by Member States to the Commission 

1. Economic items  

1.1. Withholding tax: 

For Austria, Belgium and Luxembourg (as long as they apply the transitional provisions set 
out in Chapter III), the total annual amount of tax revenue shared from the withholding tax, 
split by Member State of residence of the beneficial owners. 

For Austria, Belgium and Luxembourg (as long as they apply the transitional provisions set 
out  in  Chapter  III),  the  total  annual  amount  of  tax  revenue  shared  with  the  other  Member 
States from the withholding tax levied under Article 11(5). 

Data  on  the  total  amounts  collected  from  the  withholding  tax,  split  by  Member  State  of 
residence of the beneficial owners, should also be sent to the national institution in charge of 
compiling balance of payments statistics. 

1.2. Amount of interest payments/sales proceeds: 

For the Member States exchanging information or having opted for the voluntary disclosure 
provision  under  Article  13,  the  amount  of  interest  payments  within  their  territory  which  is 
subject to exchange of information under Article 9, split by Member State or Dependant and 
Associated Territory of residence of the beneficial owners. 

For the Member States exchanging information or having opted for the voluntary disclosure 
provision under Article 13, the amount of sales proceeds within their territory which is subject 
to  exchange  of  information  under  Article  9,  split  by  Member  State  or  Dependant  and 
Associated Territory of residence of the beneficial owners. 

For  Member  States  exchanging  information  or  having  opted  for  the  voluntary  disclosure 
mechanism, the amount of interest payments subject to exchange of information, split by type 
of interest payments according to the categories set out in Article 8(2). 

The data related to the total amounts of interest payments and sales proceeds, split by Member 
State  of  residence  of  the  beneficial  owners,  should  be  communicated  also  to  the  national 
institution in charge of the compilation of Balance of Payments statistics. 

1.3. Beneficial owner: 

For all Member States, the number of beneficial owners resident in other Member States and 
Dependent  and  Associated  Territories,  split  by  Member  State  or  Dependant  and  Associated 
Territory of residence. 

EN 

49 

   EN 

 
1.4. Paying agents: 

For all Member States, the number of paying agents (per sending Member State) involved in 
exchange of information or withholding tax for the purposes of the Directive. 

1.5. Paying agents upon receipt: 

For  all  Member  States,  the  number  of  paying  agents  upon  receipt  having  received  interest 
payments within the meaning of Article 6(4). This concerns both sending Member States, in 
which interest payments have been made to paying agents upon receipt whose effective place 
of  management  is  in  other  Member  States,  and  receiving  Member  States,  who  have  such 
entities or legal arrangements on their territory. 

2. Technical items 

2.1. Records: 

For the Member States exchanging information or having opted for the voluntary disclosure 
provision  of  Article  13,  the  number  of  records  sent  and  received.  One  record  means  one 
payment for one beneficial owner. 

2.2. Treated/corrected records: 

Number and percentage of syntactically invalid records that can be processed;  

Number and percentage of syntactically invalid records that cannot be processed; 

Number and percentage of non-treated records; 

Number and percentage of records corrected upon request; 

Number and percentage of records corrected spontaneously; 

Number and percentage of records treated successfully.  

3. Optional items: 

3.1 - For the Member States, the amount of interest payments to entities or legal arrangements 
which is made subject to exchange of information under Article 4(2), split by Member State 
of the entity's place of effective management. 

3.2 - For the Member States, the amount of sales proceeds to entities or legal arrangements 
which is made subject to exchange of information under Article 4(2) split by Member State of 
establishment of the entity. 

3.3  -  The  respective  shares  of  total  annual  tax  collected  from  resident  taxpayers  on  interest 
payments made to them by domestic paying agents and by foreign paying agents. " 

EN 

50 

   EN