The European Commission’s recommendation for simplified procedures for claiming cross-border withholding tax relief

Abstract

On 19th October, 2009, the European Commission adopted a Recommendation outlining how EU Member States could make it easier for investors resident in one EU Member State to claim entitlements to relief from withholding tax on securities income (mainly dividends and interest) received from another Member State. The Recommendation also suggests measures to eliminate tax barriers to the securities investment activities of financial institutions, while at the same time protecting tax revenues against errors or fraud. The Recommendation provides guidance on how to ensure that procedures to verify entitlement to tax relief do not hinder the functioning of the Single Market.