AEIP replies to European Commission’s consultation on Faster and Safer Relief of Excess Withholding Taxes (FASTER)
The European Association of Paritarian Institutions (AEIP) has submitted its feedback to the European Commission’s consultation on Faster and Safer Relief of Excess Withholding Taxes (FASTER) proposal for a Directive. AEIP fully supports the initiative to improve withholding taxes (WHT) procedures and the Commission’s proposal to implement relief at source and/or quick refund procedures for excess WHT.
Simone Miotto, the Executive Director of AEIP mentioned that:
“FASTER offers numerous advantages to pension funds, primarily through its streamlining of the process, standardized data requirements, and simplified form submissions. This will significantly reduce administrative burdens and allow pension funds to fully exercise their entitlement to tax exemptions and refunds.”
FASTER will render the application submission and payment processing swift, thus enabling pension savings to be reinvested promptly. However, in our feedback we raise certain considerations relating to pension funds with the aim to enhance the practical implementation of the FASTER initiative.
We think it is crucial to extend the use of digital tax residence certificates to collective investment vehicles, as pension savings are predominantly invested through transparent investment funds. Therefore, transparent investment funds should be granted access to FASTER procedures to facilitate their participation. Concerning Certified Financial Intermediaries (CFIs), we suggest that, as a general principle, investors themselves should bear the responsibility for reporting any inaccurate information. Consequently, CFIs would bear no liability for any withholding failures stemming from information provided by the registered owner.
AEIP believes that to ensure the effectiveness of the FASTER initiative, it is essential to ensure its broad applicability, thus there should be limited possibilities for deviating from FASTER procedures.
AEIP applauds the introduction of efficient WHT procedures and the necessary tools for Member States to effectively fight tax fraud and abuse. These measures are instrumental in advancing the smooth functioning of the Capital Market Union, facilitating cross-border investments, and ensuring equitable taxation practices.
Please see here to read the full AEIP input.
For further information please contact: Panayiotis Elia, AEIP Policy Advisor, Pension & Financial Affairs