Article 1 Subject matter
This Directive lays down rules on: (a) the issuance of a digital tax residence certificate by Member States; and (b) the procedure to relieve any excess withholding tax that can be levied by a Member State on dividends from publicly traded shares and, where applicable, on interest from publicly traded bonds paid to registered owners that are resident for tax purposes outside that Member State.
Article 2 Scope
1. Chapters I and IV shall apply to all Member States. Chapter II shall apply to all Member States with regard to all natural persons and entities that are resident for tax purposes in their jurisdiction. 2. Chapter III shall become applicable to all Member States that provide relief of excess withholding tax on dividends paid for publicly traded shares issued by an entity that is resident for tax purposes in their jurisdiction if: (a) they do not have a comprehensive relief-at-source system applicable to such excess withholding tax; or (b) their market capitalisation ratio, as set out in the four latest publications by the European Securities and Markets Authority (‘ESMA’) available on 31 December 2028, is equal to or more than 1,5 % for each of the four consecutive years. 3. A Member State that has a comprehensive relief-at-source system applicable to the excess withholding tax on dividends paid for publicly traded shares issued by a resident in its jurisdiction may opt to apply Chapter III if its market capitalisation ratio, as set out in the four latest publications by ESMA available on 31 December 2028, is less than 1,5 % for at least one of the four consecutive years. 4. A Member State shall apply Chapter III within five years from the fourth consecutive publication of data by ESMA that indicates that the market capitalisation ratio of that Member State reached or exceeded 1,5 % during each of the four consecutive years. 5. A Member State that provides relief of excess withholding tax on interest paid for publicly traded bonds issued by a resident in its jurisdiction may apply Chapter III. 6. Once Chapter III becomes applicable to any Member State pursuant to paragraph 2 or 4 of this Article, it shall remain applicable to that Member State, irrespective of whether the conditions that triggered its application continue to be met or not. Where a Member State opts to apply Chapter III pursuant to paragraph 3 of this Article, the exercise of that option shall be irrevocable.
Article 3 Definitions
1. For the purposes of this Directive, the following definitions apply: (1) ‘excess withholding tax’ means the difference between the amount of withholding tax levied by a Member State on payments to non-resident owners of dividends or interest from securities by applying the general domestic rate and the lower amount of withholding tax applicable by that Member State on the same dividends or interest in accordance with a double tax treaty or specific national rules, as the case may be; (2) ‘publicly traded share’ means a share admitted to trading on a regulated market or traded on a multilateral trading facility; (3) ‘publicly traded bond’ means a bond admitted to trading on a regulated market, or traded on a multilateral trading facility or on an organised trading facility; (4) ‘financial intermediary’ means any of the following which is part of the securities payment chain between the entity issuing securities and the registered owner receiving payments on such securities: (a) a central securities depository as defined in Article 2(1) of Regulation (EU) No 909/2014 of the European Parliament and of the Council ( 8 ) ; (b) a credit institution as defined in Article 4(1), point (1), of Regulation (EU) No 575/2013; (c) an investment firm; (d) a branch of any of the entities under points (a), (b) or (c); or (e) a third-country legal person that has been authorised under comparable legislation of a third country of residence to provide services comparable to those provided by any of the entities under points (a), (b) or (c), or a branch of such a third-country legal person; (5) ‘certified financial intermediary’ means a financial intermediary that is registered with a national register as referred to in Article 5; (6) ‘entity’ means a legal person or a legal arrangement, including but not limited to a corporation, partnership, trust or foundation; (7) ‘collective investment undertaking’ means a UCITS, an EU AIF or an alternative investment fund managed by an EU AIFM, or any other collective investment vehicle that, based on the national rules of the source Member State or on a double tax treaty, is entitled to relief of excess withholding tax, or a collective investment vehicle of which the underlying investors are entitled to such relief that can be requested on their behalf, except such collective investment vehicles that are, or whose manager or depositary is, established in a third country listed in Annex I to the Council conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes or in Table I of the Annex to Commission Delegated Regulation (EU) 2016/1675 ( 9 ) ; (8) ‘institution for occupational retirement provision’ means an institution for occupational retirement provision as defined in Article 6(1) of Directive (EU) 2016/2341; (9) ‘EUID’ means the European unique identifier as referred to in Article 16 of Directive (EU) 2017/1132 of the European Parliament and of the Council ( 10 ) ; (10) ‘tax identification number’ or ‘TIN’ means the unique identifier for tax purposes of a registered owner in a Member State; (11) ‘withholding tax relief procedure’ means a procedure whereby a registered owner receiving dividends or interest from securities that can be subject to excess withholding tax is relieved of, or receives a refund for, such excess withholding tax; (12) ‘competent authority’ means the authority which has been designated by a Member State in accordance with Article 5 and includes any person authorised in accordance with national rules by such an authority to act on its behalf for the purposes of this Directive; (13) ‘security’ means a publicly traded share or a publicly traded bond; (14) ‘depositary receipts’ means financial instruments which are negotiable on the capital market of a Member State or a third country and which represent ownership of the securities of an issuer within the Union while being traded on a trading venue in a Member State or a third country and traded independently of the securities of the issuer; (15) ‘large institution’ means a large institution as defined in Article 4(1), point (146), of Regulation (EU) No 575/2013; (16) ‘group’ means a group as defined in Article 2(12) of Directive (EU) 2002/87/EC of the European Parliament and of the Council ( 11 ) ; (17) ‘withholding tax agent’ means an entity that has the responsibility under or has been authorised in accordance with the national rules of the source Member State to deduct the withholding tax from the payment of dividends or interest from securities and to transfer such withholding tax to the tax authority of the source Member State; (18) ‘record date’ means the date set by the issuer of a security on which the identity of the holder of that security and the rights derived therefrom shall be determined, based on the settled positions struck in the books of the financial intermediary by book-entry at the close of business; (19) ‘settlement’ means the completion of a securities transaction where it is concluded with the aim of discharging the obligation of the parties to that transaction through the transfer of cash or securities or both, as defined in Article 2(1), point (7), of Regulation (EU) No 909/2014; (20) ‘registered owner’ means any natural person or entity that is entitled to receive dividends or interest from securities subject to tax withheld at source in a Member State as the holder of the securities on the record date, without prejudice to the adjustments to transactions pending settlement that could be made in accordance with the national rules of the source Member State, and that is not a financial intermediary acting for the account of others with respect to those dividends or interest; (21) ‘investment account’ means the account or accounts provided by financial intermediaries to registered owners via which their securities are held or registered; (22) ‘cash account’ means the account or accounts to which the payments related to the securities held or registered in the investment account are made; (23) ‘ex-dividend date’ means the date from which the shares are traded without the rights derived from the shares, including the right to participate and vote in a general meeting, where relevant; (24) ‘payment date’ means the date on which the payment of the dividend of a publicly traded share or the interest of a publicly traded bond is due to the registered owner; (25) ‘financial arrangement’ means any arrangement or series of arrangements, or any contractual obligation, whereby: (a) any part of the ownership of the publicly traded share on which a dividend is paid is, or could be, either permanently or temporarily transferred to a related or independent party; or (b) the dividend is fully or partly compensated between related or independent parties, in cash or in any other form; (26) ‘securities payment chain’ means the sequence of financial intermediaries that handle the payment of dividends or interest on securities between the securities’ issuer and a registered owner to which dividends or interest from such securities are paid, and includes brokers that are investment firms authorised under Directive 2014/65/EU of the European Parliament and of the Council ( 12 ) or that are credit institutions authorised under Directive 2013/36/EU of the European Parliament and of the Council ( 13 ) , when providing one or more investment services or performing investment activities, as well as third-country legal persons authorised under comparable rules of a third country of residence when providing investment services or performing investment activities; (27) ‘double tax treaty’ means an agreement or convention that applies between two or more jurisdictions and provides for the elimination of double taxation of income and where applicable, of capital; (28) ‘source Member State’ means the Member State of residence of the issuer of the security paying dividends or interest; (29) ‘quick refund system’ means a system whereby a payment of dividends or interest is made by taking into account the general domestic withholding tax rate followed by a request for a refund of the excess withholding tax within the timeframe set in Article 14; (30) ‘relief-at-source system’ means a system whereby the appropriate withholding tax rate, in accordance with the applicable national rules or international agreements, such as the relevant double tax treaty, is applied at the moment of payment of dividends or interest; (31) ‘comprehensive relief-at-source system’ means a relief-at-source system that is applied by a Member State and meets all of the following conditions: (a) it provides access to relief to any natural person or entity that is entitled to relief in accordance with the national rules of the source Member State or a double tax treaty, as applicable; (b) it provides relief to any natural person or entity under point (a) on the payment date, except in the case of a failure to report the information required by the Member State that applies such relief; (c) except in the circumstances as set out in Article 11(2), the Member State does not exclude requests for relief; (d) except in the circumstances as set out in Article 11(2), the Member State neither requires additional information from, nor imposes additional obligations on the natural person or entity entitled to relief, or on the financial intermediary other than the withholding tax agent, other than requiring the information and obligations provided for in Articles 12, 13, and 15, as applicable; (e) the Member State has laid down rules on liability for all or part of the loss of withholding tax revenue incurred by that Member State as a result of applying that relief-at-source system; and (f) the Member State has laid down rules on effective, proportionate and dissuasive penalties applicable to infringements of national provisions on that relief-at-source system; (32) ‘market capitalisation’ means the total value of the publicly traded shares of companies whose shares are admitted to trading on a regulated market or on a multilateral trading facility, represented in a Member State as published on an annual basis by ESMA; (33) ‘market capitalisation ratio’ means the ratio expressed as a percentage of the market capitalisation of a Member State on 31 December to the overall market capitalisation of the Union on 31 December, in a given year; (34) ‘standard refund system’ means a system whereby a payment of dividends or interest is made taking into account the general domestic withholding tax rate followed by a request for a refund of the excess withholding tax not falling under the procedure set out in Article 14; (35) ‘investment firm’ means an investment firm as defined in Article 4(1), point (1), of Directive 2014/65/EU; (36) ‘UCITS’ means a UCITS as defined in Article 1(2) of Directive 2009/65/EC of the European Parliament and of the Council ( 14 ) ; (37) ‘EU AIF’ means an EU AIF as defined in Article 4(1), point (k), of Directive 2011/61/EU of the European Parliament and of the Council ( 15 ) ; (38) ‘EU AIFM’ means an EU AIFM as defined in Article 4(1), point (l), of Directive 2011/61/EU. 2. For the purposes of paragraph 1, points (2) and (3), of this Article, ‘regulated market’, ‘multilateral trading facility’ and ‘organised trading facility’ mean a regulated market, a multilateral trading facility and an organised trading facility as defined in Article 4(1), points (21), (22) and (23), of Directive 2014/65/EU, respectively. 3. For the purposes of paragraph 1, point (20), source Member States may consider, in accordance with their national rules, the holder of depositary receipts as the registered owner, instead of the holder of the underlying securities, as if the holder of depositary receipts had directly invested in those securities.
Article 4 Digital tax residence certificate (eTRC)
1. Member States shall provide for an automated process to issue digital tax residence certificates (eTRC) to natural persons or entities deemed resident for tax purposes in their jurisdiction. 2. Subject to paragraph 4, Member States shall issue the eTRC, based on the information of which the issuing authority has knowledge on the date of issuance, within 14 calendar days of the submission of a request. The eTRC shall comply with the technical requirements of Annex I and shall include the following information: (a) if the taxpayer is a natural person, the first and last name, the date of birth and the tax identification number or, in its absence, any functional equivalent used for tax purposes; (b) if the taxpayer is an entity, the name, the tax identification number or, in its absence, any functional equivalent used for tax purposes, and where available, the European unique identifier (EUID) or the legal entity identifier (LEI) or any legal entity registration number which is valid for the entire period covered by the eTRC; (c) the address of the taxpayer; (d) the date of issuance of the eTRC; (e) the period covered; (f) the tax authority issuing the eTRC; (g) one or more double tax treaties pursuant to which the taxpayer requests to be deemed resident for tax purposes in the Member State of issuance, where applicable; (h) any additional information that is necessary for proving the taxpayer’s residence for tax purposes insofar as the eTRC is not to be used for relief of excess withholding tax within the Union. 3. The eTRC shall: (a) cover a period that does not exceed the calendar year or the fiscal year for which it is issued, as applicable in the issuing Member State; and (b) be valid for certifying the tax residence for the period covered unless the Member State issuing the eTRC has evidence that the person to which the eTRC refers is not resident for tax purposes in its jurisdiction for all or part of that period and that Member State completely or partially invalidates the eTRC. 4. If more than 14 calendar days are required to verify the tax residence of a specific taxpayer, the Member State shall inform the natural person or entity requesting the eTRC of the additional time needed and the reasons for the delay. 5. Member States shall recognise an eTRC issued by another Member State as proof of tax residence of a taxpayer in that other Member State in accordance with paragraph 3, without prejudice to the possibility for Member States to prove that that taxpayer is resident for tax purposes in their jurisdiction. 6. A Member State shall take the appropriate measures to require a natural person or entity deemed resident for tax purposes in its jurisdiction to inform the tax authority that issues the eTRC about any change that could affect the validity or content of the eTRC. 7. Member States shall take the necessary measures to require that an eTRC be provided, where proof of tax residence is required for a natural person or entity deemed resident for tax purposes in a Member State to apply for relief at source or a quick refund in order to obtain relief of excess withholding tax on dividends paid for publicly traded shares or interest paid for publicly traded bonds, if applicable, issued by a resident in their jurisdiction. 8. The Commission shall adopt implementing acts laying down standard computerised forms for the issuance of an eTRC, including linguistic arrangements and technical protocols, including security standards. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 21.
Article 5 National register of certified financial intermediaries
1. Member States referred to in Article 2(2) and (4) shall establish a national register of certified financial intermediaries. 2. Member States referred to in Article 2(3) and (5) that opt to apply Chapter III shall establish a national register of certified financial intermediaries. 3. Member States establishing a national register pursuant to paragraph 1 or 2 shall designate a competent authority responsible for maintaining and updating that national register. 4. The national registers shall include the following information on certified financial intermediaries: (a) the name of the certified financial intermediary; (b) the date of registration of the certified financial intermediary; (c) the contact details and any existing website of the certified financial intermediary; (d) the EUID or, where the certified financial intermediary has no EUID, the legal entity identifier (LEI) or any legal entity registration number issued by its country of residence. 5. For the purposes of this Article and of Articles 10 to 15, Member States shall permit a certified financial intermediary to assume the obligations and responsibilities set out in Articles 10 to 15 in respect of the position of a financial intermediary that is part of the securities payment chain and is not a certified financial intermediary if the financial intermediary and the certified financial intermediary have so agreed. 6. The national registers shall be made publicly accessible on the European Certified Financial Intermediary Portal referred to in Article 6 (the ‘Portal’), via a website of the Commission, and updated at least once a month. 7. Member States shall remain responsible for any decisions regarding the registration or rejection of a financial intermediary or regarding the removal of a financial intermediary from their national registers, and for measures imposed on financial intermediaries. 8. Any rights and obligations stemming from decisions as referred to in paragraph 7 shall be applicable from the notification by the corresponding Member State to the financial intermediary concerned. 9. The Commission shall not be held liable under any circumstances for the content on the Portal or for the failure to exchange information between Member States regarding the registration or rejection of a financial intermediary or regarding the removal of a financial intermediary from their national registers or for any measures imposed by Member States on financial intermediaries.
Article 6 Development and operation of the European Certified Financial Intermediary Portal
1. The Commission shall develop and operate the European Certified Financial Intermediary Portal (the ‘Portal’) either by its own means or through a third party. 2. If the Commission decides to develop or operate the Portal through a third party, the Commission shall choose the third party and enforce the agreement concluded with that third party in accordance with Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council ( 16 ) . 3. The Portal shall serve as the electronic access point for financial intermediaries to request to register with the national registers of the Member States. The Portal shall accommodate information exchange between Member States regarding the registration or rejection of a financial intermediary, and the removal of a financial intermediary from a national register and the measures imposed on financial intermediaries. 4. Member States shall ensure that the information required pursuant to Articles 7, 8 and 9 of this Directive is provided to the Portal and that their national registers are interoperable within the Portal. 5. The Commission shall adopt implementing acts laying down the technical specifications for the operation of the Portal. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 21.
Article 7 Requirement to register as a certified financial intermediary
1. Member States maintaining a national register in accordance with Article 5 shall require all large institutions that handle payments of dividends and, where relevant, interest on securities issued by a resident in their jurisdiction, and central securities depositories as referred to in Article 3(1), point (4), that are the withholding tax agent for those payments, to register with their national register. 2. Member States maintaining a national register in accordance with Article 5 shall enable, upon request, the registration in that national register of any financial intermediary that meets the requirements of Article 8.
Article 8 Registration procedure
1. Member States shall ensure that where a financial intermediary submits a request to register with their national register, that request shall be approved within three months of the date of submission, provided the financial intermediary provides evidence that it fulfils all of the following requirements: (a) it is resident for tax purposes in a Member State or a third-country jurisdiction not included in Annex I to the Council conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes or in Table I of the Annex to Delegated Regulation (EU) 2016/1675; (b) if the requesting financial intermediary is a credit institution, an investment firm or a central securities depository, an authorisation from the relevant competent authority in the jurisdiction of residence for tax purposes to perform custodial activities; or if the requesting financial intermediary is a central securities depository, an authorisation from the relevant competent authority in the jurisdiction of residence for tax purposes to perform such activities; where the requesting financial intermediary is resident for tax purposes in a third-country jurisdiction and has obtained such authorisation under national rules that are not deemed comparable with Directive 2013/36/EU or Directive 2014/65/EU, as applicable, by a Member State, that Member State may deem this requirement to be unfulfilled; (c) a declaration of compliance with the provisions of Directive (EU) 2015/849 of the European Parliament and of the Council ( 17 ) or with comparable rules of a third-country jurisdiction not included in Annex I to the Council conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes or in Table I of the Annex to Delegated Regulation (EU) 2016/1675. 2. A Member State shall permit a certified financial intermediary to act on behalf of another financial intermediary that is part of the same group and to assume the obligation set out in Article 7 and the obligations and responsibilities set out in Articles 10 to 15. 3. If the requesting financial intermediary is resident for tax purposes in a third-country jurisdiction where neither Directive 2010/24/EU nor a convention that provides assistance in the collection of taxes applies to the recovery of all or part of the loss of withholding tax revenue pursuant to Article 18, the Member State to which the request has been submitted may require sufficient and proportionate guarantees to ensure the recovery of such loss in relation to the request for relief. 4. A Member State may reject the request for registration if: (a) the financial intermediary concerned has committed one or more offences or infringements under the national rules of a Member State or of another jurisdiction and such offences or infringements have led to a loss of withholding tax revenue; or (b) an inquiry into potential tax fraud or tax abuse is opened by a Member State or another jurisdiction in relation to the financial intermediary concerned which could lead to a loss of withholding tax revenue. For the purposes of point (a), the source Member State shall only take such offences or infringements into account to the extent that they came to the attention of that Member State not more than 10 years prior to the submission of the request for registration. 5. Financial intermediaries shall, without undue delay, notify the competent authority of the Member State of any change in the information provided under paragraph 1, points (a) to (c). 6. Where the request for registration is rejected pursuant to paragraph 4, the Member State shall ensure that the financial intermediary is allowed to submit another request for registration, if the Member State has determined that the circumstances that caused the rejection have been remedied.
Article 9 Removal from the national register
1. A Member State shall remove from its national register any certified financial intermediary registered pursuant to Article 7(2), where the certified financial intermediary: (a) requests such removal; or (b) no longer meets the requirements of Article 8. 2. A Member State may remove from its national register any certified financial intermediary registered pursuant to Article 7(2): (a) where the certified financial intermediary has been found not to have complied with its obligations under this Directive or Directive (EU) 2015/849 or under comparable rules of a third country of residence for tax purposes; or (b) where the certified financial intermediary has been found to have committed one or more offences or infringements under the national rules of a Member State or another jurisdiction and such offences or infringements have led to a loss of withholding tax revenue; or (c) where an inquiry is opened by a Member State or another jurisdiction in relation to the certified financial intermediary concerning potential tax fraud or tax abuse which could lead to a loss of withholding tax revenue. For the purposes of point (b), the source Member State shall only take such offences or infringements into account to the extent that they became known to that Member State not more than 10 years prior to the removal of the financial intermediary. 3. A Member State may prohibit any certified financial intermediary registered pursuant to Article 7(1) from requesting relief under this Directive: (a) where the certified financial intermediary has been found not to have complied with its obligations under this Directive or Directive (EU) 2015/849 or with the comparable rules of a third country of residence for tax purposes; or (b) where the certified financial intermediary has been found to have committed one or more offences or infringements under the national rules of a Member State or another jurisdiction and such offences or infringements have led to a loss of withholding tax revenue; or (c) where an inquiry is opened by a Member State or another jurisdiction in relation to the certified financial intermediary concerning potential tax fraud or tax abuse which could lead to a loss of withholding tax revenue. For the purposes of point (b), the source Member State shall only take such offences or infringements into account to the extent that they became known to that Member State not more than 10 years prior to the prohibition to request relief. Where a Member State prohibits a certified financial intermediary pursuant to this paragraph, it shall without delay update the information contained in the national register accordingly. 4. Where a Member State removes a financial intermediary from the national register pursuant to paragraph 1 or 2, or prohibits a certified financial intermediary from requesting relief pursuant to paragraph 3, the Member State shall ensure that the financial intermediary is re-registered or is allowed to submit another request for relief, if the Member State determines that the circumstances that caused the removal or prohibition have been remedied.
Article 10 Obligation to report
1. Member States shall take the necessary measures to require certified financial intermediaries registered with their national register to report to their competent authority the information referred to under headings A to E of Annex II within the second month following the month of the payment date. If a settlement instruction in respect of any part of a transaction is pending, certified financial intermediaries shall indicate the part for which settlement is pending. 2. In addition to the information referred to in paragraph 1 of this Article, Member States may require certified financial intermediaries in their national register to report to their competent authority the information referred to under heading F and, where applicable, heading G of Annex II, within the second month following the month of the payment date. 3. Member States shall take the necessary measures to require that certified financial intermediaries as referred to in Article 5(5) report to their competent authority the information referred to in paragraph 1 of this Article and, where applicable, paragraph 2 of this Article with respect to any part of the securities payment chain for which the financial intermediary that handles the payment is not a certified financial intermediary. 4. Notwithstanding paragraphs 1, 2 and 3, Member States may take the necessary measures to require that only the withholding tax agent or a certified financial intermediary in the relevant security payment chain, appointed by their competent authority or designated under national rules, reports the information referred to in those paragraphs to the competent authority. The certified financial intermediaries shall provide that information along the securities payment chain in sequential order and in respect of the position of those certified financial intermediaries in the securities payment chain of which they are part, with the effect that it ultimately reaches the withholding tax agent or the concerned certified financial intermediary. 5. Member States referred to in Article 2(5) that opt to apply Chapter III and that maintain a national register established in accordance with Article 5 shall not require information under heading E of Annex II to be reported. 6. The Commission shall adopt implementing acts laying down standard computerised forms, including the linguistic arrangements, and requirements for the communication channels, for the reporting of information referred to in Annex II. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 21. 7. Member States shall require certified financial intermediaries in their national register to keep the documentation supporting the information reported for 10 years and to provide access to any other information necessary for the correct application of rules on withholding taxes and shall require certified financial intermediaries to delete or anonymise any personal data included in such documentation as soon as the audit has been completed and at the latest 10 years after reporting.
Article 11 Request for relief at source or quick refund
1. Source Member States shall require a certified financial intermediary that maintains the investment account of a registered owner receiving dividends distributed or interest paid by a resident in the source Member State to request relief pursuant to Article 13 or Article 14, as applicable, on behalf of that registered owner, if the following conditions are met: (a) the registered owner has authorised the certified financial intermediary to request relief on its behalf; and (b) the certified financial intermediary has verified and established the registered owner’s eligibility for relief in accordance with Article 12 or Article 15, as applicable. 2. Notwithstanding paragraph 1 of this Article, Member States may exclude, completely or partially, requests for relief under the systems as provided for under Articles 13 and 14, where any of the following circumstances occur: (a) the dividend has been paid on a publicly traded share that the registered owner acquired in a transaction carried out within a period of five days before the ex-dividend date; (b) the dividend payment on the underlying security for which relief is requested is linked to a financial arrangement that has not been settled, expired or otherwise terminated before the ex-dividend date; (c) at least one of the financial intermediaries in the securities payment chain is not a certified financial intermediary and no certified financial intermediary has assumed the position of that financial intermediary for the purposes of Article 10 in accordance with Article 5(5). (d) an exemption of the withholding tax is claimed; (e) a reduced withholding tax rate not deriving from double tax treaties is claimed; (f) the dividend payment exceeds a gross amount of at least 100 000 EUR, per registered owner and per payment date. For the purposes of the first subparagraph, point (f), of this paragraph, the amount of the dividend payment shall be determined by the gross dividend amount per investor holding equity in a collective investment undertaking where that underlying investor is entitled to relief pursuant to Article 15(2), points (a) or (b), as applicable. 3. Paragraph 2, point (f), shall not apply where either of the following is entitled to relief of excess withholding tax: (a) a statutory pension scheme of a Member State or an institution for occupational retirement provision registered or authorised in a Member State in accordance with Article 9(1) of Directive (EU) 2016/2341; or (b) a collective investment undertaking that is a UCITS established in accordance with Article 1(1) of Directive 2009/65/EC, an EU AIF or an EU AIFM. 4. Paragraph 2 shall apply to any arrangement whereby the dividend payment is split or to any collective investment undertaking other than those referred to in paragraph 3, point (b), that has been established with the sole purpose of keeping the dividend payment below the amount referred to in paragraph 2, point (f). 5. Notwithstanding paragraph 1, where the financial intermediary that maintains the investment account of a registered owner is not a certified financial intermediary, Member States shall allow a certified financial intermediary to request relief pursuant to Article 13 or Article 14, as applicable, subject to Article 5(5) and Article 10. 6. The systems of relief pursuant to Article 13 and Article 14, as applicable, shall not reduce the control powers of Member States under their national rules in relation to the taxable income to which such relief was applied and do not affect the taxing rights of Member States. 7. Where, prior to the entry into force of this Directive, a Member State has a relief-at-source system or quick refund system or a combination thereof, and that Member State applies Chapter III pursuant to Article 2, that Member State shall ensure the compliance of that system with Chapter III for any request for relief covered by this Directive, i.e. relief relating to dividends arising from publicly traded shares and, where the Member State decides to include interest from publicly traded bonds paid to non-residents, also to such interest. Member States may also maintain and apply an existing national relief-at-source system to the cases referred to in paragraph 2, point (e), of this Article in which verifications are performed in order to: (a) ensure equal treatment between domestic and cross-border situations to comply with Chapters 2 and 4 of Title IV of the Treaty on the Functioning of the European Union; or (b) apply reduced withholding tax rates in accordance with Council Directives 2003/49/EC ( 18 ) or 2011/96/EU ( 19 ) .
Article 12 Due diligence of the registered owner’s eligibility
1. Member States shall take the necessary measures to require that a certified financial intermediary requesting relief on behalf of a registered owner under Article 13 or Article 14, as applicable, obtain a declaration from the registered owner that the registered owner: (a) is entitled to relief of withholding tax with respect to the dividend or interest in accordance with the national rules of the source Member State or a double tax treaty, where applicable, including the legal basis and the applicable withholding tax rate; and (b) if required by the source Member State, is the beneficial owner of the dividend or interest in accordance with the national rules of the source Member State or a double tax treaty, where applicable; and (c) has or has not engaged in a financial arrangement linked to the underlying publicly traded share that has not been settled, expired or otherwise terminated before the ex-dividend date; and (d) undertakes to inform the certified financial intermediary of any change in its circumstances without undue delay. 2. Member States shall take the necessary measures to require that certified financial intermediaries requesting relief on behalf of a registered owner under Articles 13 and 14, as applicable, verify, on the basis of the information available to those certified financial intermediaries: (a) the eTRC of the registered owner or a proof of tax residence in a third country deemed appropriate by the source Member State; (b) notwithstanding point (a), the documentation deemed appropriate by the source Member State, in cases where a registered owner is an entity for which an eTRC cannot be issued or that cannot obtain a proof of tax residence in a third country because the entity is disregarded for tax purposes and its income, or part thereof, is taxed at the level of the persons who have an interest in that entity, but that entity is entitled to the relief of withholding tax with respect to the dividend or interest in accordance with the national rules of the source Member State or a double tax treaty, where applicable; (c) the registered owner’s declaration under paragraph 1 of this Article and the registered owner’s tax residence against the information that the certified financial intermediary has obtained or has an obligation to obtain, including the information collected for other tax purposes or on the basis of anti-money laundering requirements, which the certified financial intermediary is subject to under Directive (EU) 2015/849, or comparable information required in third countries; (d) the registered owner’s entitlement to a specific reduced withholding tax rate in accordance with the national rules of the source Member State or with a double tax treaty between the source Member State and the jurisdiction where the registered owner is resident for tax purposes; (e) in the case of a dividend payment, the possible existence of any financial arrangement that has not been settled, expired or otherwise terminated on the ex-dividend date; (f) in the case of a dividend payment, whether the underlying share has been acquired by the registered owner in a transaction carried out within a period of five days before the ex-dividend date. For the purposes of the first subparagraph, point (a), of this paragraph, the source Member State may deem a tax residence certificate as appropriate proof of tax residence in a third country if the content of the certificate is equivalent to that provided for in Article 4(2) and the certificate meets the technical requirements in point 1 of Annex I. 3. Member States may allow a certified financial intermediary to obtain the declaration referred to in paragraph 1 and to carry out the verifications provided for in paragraph 2, points (a) to (d), on an annual basis unless the certified financial intermediary knows or ought to know that there is a change of circumstances or that the declaration or the information to be verified is incorrect or unreliable. 4. In the case provided for in Article 5(5), Member States shall allow the certified financial intermediary to rely on documentation collected and information verified by the financial intermediary that maintains the investment account of a registered owner according to this Article, without prejudice to the fact that those obligations remain the responsibility of the certified financial intermediary. 5. Member States shall require certified financial intermediaries requesting relief pursuant to Article 13 or Article 14, as applicable, to keep all supporting documentation and provide access thereto in accordance with Article 10(7). 6. The Commission shall adopt implementing acts laying down standard templates of computerised forms for the declaration referred to in this Article, including the linguistic arrangements. Such templates shall include the information set out in paragraph 1, points (a), (c), and (d), of this Article and enable Member States to request specific additional information. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 21.
Article 13 Relief-at-source system
Member States may establish a system to allow certified financial intermediaries that maintain the investment account of a registered owner to request relief at source on behalf of a registered owner in accordance with Article 11 by providing the following information to the withholding tax agent: (a) the tax residence of the registered owner or the information contained in the documentation referred to in Article 12(2), point (b), where applicable; and (b) the applicable withholding tax rate on the payment in accordance with national rules or a double tax treaty, as applicable.
Article 14 Quick refund system
1. Member States may establish a system to allow certified financial intermediaries that maintain the investment account of a registered owner to request a quick refund of the excess withholding tax on behalf of the registered owner in accordance with Article 11 if the information referred to in paragraph 3 of this Article is provided within the second month following the month of the payment date of the dividend or interest. 2. Without prejudice to paragraph 4 of this Article, Member States shall process a refund request made in accordance with paragraph 1 of this Article within 60 calendar days after the end of the period to request the quick refund. Member States shall apply interest in accordance with Article 16 on the amount of such a refund for each day of delay after the 60th day. 3. A certified financial intermediary requesting a quick refund shall provide the following information to the relevant Member State: (a) the identification of the registered owner as referred to in heading B of Annex II; (b) the identification of the dividend or interest payment as referred to in headings D and G of Annex II, where applicable; (c) the basis of the applicable withholding tax rate and the total amount of excess withholding tax to be refunded; (d) the tax residence of the registered owner, including the eTRC verification code, where applicable, or the information contained in the documentation referred to in Article 12(2), point (b), where applicable; (e) the registered owner’s declaration in accordance with Article 12. 4. Member States may reject a refund request made under this Article in any of the following cases: (a) the requirements provided for in paragraph 1 or 3 of this Article or in Article 11 or 12 are not met; (b) the information necessary to reconstruct the relevant securities payment chain and referred to in Annex II has not been completely and correctly provided at the end of the period set out in paragraph 1 of this Article; (c) the Member State, based on risk assessment criteria, initiates any verification procedure or tax audit according to its national rules with respect to the refund request. 5. A rejection of a refund request pursuant to paragraph 4 shall not preclude the application of late payment interest in accordance with paragraph 2 in the event that the refund is ultimately granted and the circumstances set out in paragraph 4, points (a) or (b), do not exist. 6. A rejection as referred to in paragraph 4, points (a) and (b), shall be communicated to the requesting certified financial intermediary and shall not preclude a request for a refund under the standard refund system established under national rules. 7. The Commission shall adopt implementing acts laying down standard computerised forms, including the linguistic arrangements, and requirements for the communication channels for the submission of requests under this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 21.
Article 15 Special provisions for indirect investments
1. Member States shall allow a certified financial intermediary that maintains the investment account of a registered owner that receives dividends or interest to request relief pursuant to Article 13 or Article 14, as applicable, on behalf of that registered owner, provided that the requirements set out in paragraphs 2 to 5 of this Article are met. 2. For the purposes of paragraph 1, the registered owner shall be: (a) a collective investment undertaking which holds securities for the account of investors entitled to relief of withholding tax with respect to the dividends or interest in accordance with the national rules of the source Member State or a double tax treaty, where applicable; or (b) a designated legal person under the fund rules, instruments of incorporation or prospectus of a collective investment undertaking that holds the securities in the investment account that give rise to the dividends or interest, and that maintains internal records enabling the individual allocation of those securities to that collective investment undertaking or to the investors in that collective investment undertaking, as applicable, where the collective investment undertaking or the investors in the collective investment undertaking are entitled to relief of withholding tax with respect to that dividend or interest in accordance with the national rules of the source Member State or a double tax treaty, where applicable. 3. For the purposes of paragraph 1, the certified financial intermediary requesting relief shall obtain a declaration from: (a) each collective investment undertaking entitled to relief of withholding tax or each investor in the collective investment undertaking entitled to such relief, as applicable, whose securities are held by the registered owner, indicating that: (i) they are entitled to relief of withholding tax with respect to the dividend or interest in accordance with the national rules of the source Member State or a double tax treaty, where applicable, including the legal basis and the applicable withholding tax rate; and (ii) if required by the source Member State, they are the beneficial owner of the dividend or interest in accordance with the national rules of the source Member State or a double tax treaty, where applicable; and (iii) they have authorised relief to be requested on their behalf under this Article; and (iv) if relief is granted, they waive their right to independently request relief from the source Member State under this Directive or under the systems pursuant to the national rules of Member States; (b) the registered owner referred to in paragraph 2, point (a), indicating the applicable withholding tax rates with respect to the dividend or interest paid; (c) the registered owner referred to in paragraph 2, point (b), identifying the collective investment undertaking for which the securities giving rise to the dividend or interest are held, in accordance with its internal records, and indicating the applicable withholding tax rates with respect to the dividend or interest paid; (d) the registered owner with the information referred to in Article 12(1), points (c) and (d). 4. For the purposes of paragraph 1 of this Article, the certified financial intermediary requesting relief at source pursuant to Article 13 shall provide the withholding tax agent with: (a) the information referred to in paragraph 3, point (b) or (c), of this Article as applicable; and, as regards the collective investment undertaking or the investors in a collective investment undertaking, information on their tax residence or the information contained in the documentation referred to in Article 12(2), point (b), as applicable, instead of the information referred to in Article 13; and (b) if the investors in a collective investment undertaking are entitled to relief, the amount of dividends or interest attributable to each investor entitled to relief pursuant to Article 15(2). 5. For the purposes of paragraph 1 of this Article, where the certified financial intermediary requests relief pursuant to Article 14, it shall provide the source Member State with, instead of the information referred to in Article 14(3), points (d) and (e), the information referred to in paragraph 3 of this Article and the tax residence of the collective investment undertaking or of the investors in a collective investment undertaking, including the eTRC verification code or the information referred to in Article 12(2), point (b), as applicable. If the investors in a collective investment undertaking are entitled to relief, the certified financial intermediary shall also provide the source Member State with the amount of dividends or interest attributable to each investor entitled to relief pursuant to Article 15(2), as applicable. 6. Member States shall take the necessary measures to require that certified financial intermediaries requesting relief under this Article verify, on the basis of the information available to them: (a) the documentation referred to in Article 12(2), point (a) or (b), with respect to each collective investment undertaking or each investor in a collective investment undertaking, as applicable, entitled to relief; (b) the entitlement of the collective investment undertaking or of the investors in a collective investment undertaking, as applicable, to a specific exemption or reduced withholding tax rate in accordance with the national rules of the source Member State or a double tax treaty between the source Member State and the jurisdiction of residence for tax purposes, as applicable; (c) in the case of a dividend payment, the possible existence of any financial arrangement that has not been settled, expired or otherwise terminated before the ex-dividend date. 7. Article 12(1), (2) and (3) shall not apply where relief is requested pursuant to this Article. 8. The Commission shall adopt implementing acts laying down standard computerised forms, including the linguistic arrangements, and requirements for the communication channels for the submission of requests under paragraph 5 of this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 21.
Article 16 Late payment interest
Pursuant to Article 14(2), Member States shall, where provided for under national rules, apply interest at a rate equal to the interest, or equivalent charge, applied by the Member State to late payments of withholding tax refunds related to the taxation of dividends or interest, as applicable.
Article 17 Standard refund system
1. Member States shall ensure that a standard refund system is in place and applicable where requests for relief within the scope of this Directive are excluded from the relief-at-source system under Article 13 and from the quick refund system under Article 14, as applicable. 2. Member States shall adopt the necessary measures to require that, where Article 13 or Article 14 as relevant, does not apply to dividends due to the conditions set out in this Directive not being met, those entitled to the refund or their authorised representative requesting refund of the excess withholding tax on such dividends provide at least the information required under heading E of Annex II, unless that information has already been provided pursuant to Article 10.
Article 18 Liability
Member States shall take appropriate measures under their national rules to ensure that a certified financial intermediary that does not comply, whether completely or partially, with its obligations under Article 10, 11, 12, 13, 14 or 15 can be held liable for all or part of the loss of withholding tax revenue.
Article 19 Penalties
Member States shall lay down the rules on penalties applicable to infringements of national provisions adopted pursuant to this Directive and shall take all measures necessary to ensure that they are implemented. Those penalties shall be effective, proportionate and dissuasive.
Article 20 Publications by ESMA
1. From 2026 at the latest, ESMA shall publish, on an annual basis and within 120 working days of the beginning of each year, the market capitalisation and the market capitalisation ratio of each Member State for at least the preceding year. ESMA shall develop draft regulatory technical standards on the methodology for the calculation of market capitalisation and the market capitalisation ratio as defined in Article 3(1), points (32) and (33), respectively. ESMA shall submit those draft regulatory technical standards to the Commission by 31 October 2025. 2. Power is delegated to the Commission to adopt the regulatory technical standards referred to in paragraph 1 of this Article in accordance with the procedure laid down in Articles 10 to 14 of Regulation (EU) No 1095/2010.
Article 21 Committee procedure
1. The Commission shall be assisted by a committee. That committee shall be a committee within the meaning of Regulation (EU) No 182/2011. 2. Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.
Article 22 Evaluation
1. The Commission shall, by 31 December 2032, evaluate the impact of the following on the achievement of the objectives of this Directive: (a) the mechanisms of reporting in Article 10; and (b) the option not to apply Chapter III by Member States which meet the conditions of Article 2(3). The Commission shall, within the same timeframe, submit a report to the European Parliament and the Council. 2. The Commission shall, by 31 December 2034 and every five years thereafter, examine and evaluate the functioning of this Directive, including the potential need to amend specific provisions, and submit a report to the European Parliament and the Council. 3. Member States shall communicate to the Commission relevant yearly statistical data, as referred to in paragraph 4, for the evaluation of this Directive, for the purpose of improving withholding tax relief procedures to reduce double taxation as well as combat tax abuse. 4. The Commission shall, in accordance with the procedure referred to in Article 21(2), establish a list of yearly statistical data to be provided by the Member States for the purposes of the evaluation of this Directive, as well as the format and the conditions of communication of that information. 5. The Commission shall keep the information communicated to it pursuant to this Directive confidential in accordance with the provisions applicable to Union institutions. 6. Information communicated to the Commission by a Member State under paragraph 3, as well as any report or document produced by the Commission using such information, may be transmitted to other Member States. Any such information transmitted shall be covered by the obligation of official secrecy and enjoy the protection extended to similar information under the national rules of the Member State which received it.
Article 23 Personal data protection
1. Member States shall, for the purposes of the correct application of this Directive, restrict the scope of the obligations and rights provided for in Articles 13 to 19 of Regulation (EU) 2016/679 to the extent required in order to safeguard the interests referred to in Article 23(1), point (e), of that Regulation in so far as such obligations or the exercise of such rights may jeopardise those interests. 2. When processing personal data, certified financial intermediaries and the competent authorities of Member States shall be considered as controllers, within the meaning of Article 4(7) of Regulation (EU) 2016/679, within the scope of their respective activities under this Directive. 3. Information, including personal data, processed in accordance with this Directive shall not be retained longer than is necessary to achieve the purposes of this Directive, and in any case in accordance with each data controller’s domestic rules on the statute of limitations.
Article 24 Notification
A Member State that establishes and maintains a national register pursuant to Article 5, shall inform the Commission of any subsequent changes to the rules governing that national register. The Commission shall publish that information in the Official Journal of the European Union and update it as necessary.
Article 25 Transposition
1. Member States shall adopt and publish, by 31 December 2028, the laws, regulations and administrative provisions necessary to comply with this Directive. They shall immediately inform the Commission thereof. They shall apply those provisions from 1 January 2030. When Member States adopt those measures, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States. 2. Member States shall communicate to the Commission the text of the main measures of national law which they adopt in the field covered by this Directive. 3. Member States which meet the conditions of Article 2(3) at the time of the transposition of this Directive and do not opt to apply Chapter III shall notify the Commission by 31 December 2028. They shall communicate to the Commission, without delay, any subsequent change to their national relief-at-source system concerning the conditions listed in Article 3(1), point (31). The Member States referred to in the first subparagraph of this paragraph shall adopt and publish the laws, regulations and administrative provisions necessary to comply with Chapter III as set out in Article 2(3) or within five years from the fourth consecutive publication of the data by ESMA, as set out in Article 2(4), indicating that the market capitalisation ratio of that Member State has reached or exceeded the threshold set out in Article 2.
Article 26 Entry into force
This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union .
Article 27 Addressees
This Directive is addressed to the Member States.