EU moves to simplify claiming back tax on foreign dividends

[ClubMan]

For what it's worth (hopefully not [too] off topic):

Fair and simple taxation: better withholding tax procedures will boost cross-border investment and help fight tax abuse

The European Commission has today proposed new rules to make withholding tax procedures in the EU more efficient and secure for investors, financial intermediaries (e.g. banks) and Member State tax administrations.

ec.europa.eu

Withholding tax (WHT) rates

Description of Withholding tax WHT rates

taxsummaries.pwc.com

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[Brendan Burgess]

These are very interesting links.

The first link proposes that by 2027, member countries will

• Two fast-track procedures complementing the existing standard refund procedure: a “relief at source” procedure and a “quick refund” system, which will make the relief process faster and more harmonised across the EU. Member States will be able to choose which one to use – including a combination of both.
  • Under the “relief at source” procedure, the tax rate applied at the time of payment of dividends or interest is directly based on the applicable rules of the double taxation treaty provisions.
  • Under the “quick refund” procedure, the initial payment is made taking into account the withholding tax rate of the Member State where the dividends or interest is paid, but the refund for any overpaid taxes is granted within 50 days from the date of payment.

So if I understand this correctly, The Germans could decide to just withhold 15% tax instead of 25%. An Irish investor would then be saved from the hassle of claiming back the 10%. They would get the 15% as a credit on their Irish tax return.

If the Germans don't go for that, then they would have to make refunds within 50 days. At present, it takes over 18 months.

 

[Brendan Burgess]

The second link is to Withholding tax rates in different countries.

The rates on dividends for non-residents are

France 12.8%
Germany 25%
Italy 26%
Netherlands 15%
Spain 19%
UK 0%
United States 30%

I thought that with CRH shares if you fill in the right forms, there are no withholding taxes?