Comments Requested by October 22: Draft Letter to EU Commission on Withholding Tax Initiative

[33833]

October 19, 2021

TO: Global Tax Committee
Tax Committee RE: Comments Requested by October 22: Draft Letter to EU Commission on Withholding Tax Initiative

 

The EU Commission released an Inception Impact Assessment in advance of its upcoming proposal on a "new EU-wide common system for the avoidance of double taxation and prevention of tax abuse in the field of withholding taxes." The initiative aims to facilitate cross-border investment and to prevent tax abuse by making withholding tax relief procedures on dividend and/or interest payments for non-resident investors more efficient and by increasing the ability of tax administrations to exchange information.

The roadmap identifies three potential policy options (either separate or combined) that will be considered:

Option 1: Improving withholding tax refund procedures to make them more efficient.

Option 2: Establishment of a fully-fledged common EU relief at source system.

Option 3: Enhancing the existing administrative cooperation framework to verify entitlement to treaty benefits.

The attached draft letter to the Commission states ICI's strong support for a widely applicable, practical, and reliable mechanism for providing investors with appropriate treaty relief. The letter describes the current treaty relief difficulties for collective investment vehicles and the potential benefits of a Treaty Relief and Compliance Enhancement (TRACE)-like regime.

Please provide any comments to the draft letter by close of business on Friday, October 22nd to the undersigned at katie.sunderland@ici.org. A broader public consultation on this initiative will follow soon and ICI will provide more detailed comments at that time.

 

Katie Sunderland
Assistant General Counsel