France Post Marché, representing the post-market industry in France, welcomes the opportunity to provide feedback on the European
Commission’s proposal for a directive simplifying the Union framework for direct taxation (the “Tax Omnibus Directive”).
Custodians apply EU withholding tax rules as financial intermediaries, responsible for numerous withholdings, reporting, due diligence and payment obligations.
Fragmented national approaches, overlapping requirements and legal uncertainty therefore generate substantial operational costs and may impede cross-border
financing and investment. Simplification should produce effective, proportionate and workable rules, rather than transfer further responsibilities to financial intermediaries.
Measures proposed in the Tax Omnibus are a step in the right direction and we fully support the proposal in its current form, in particular the measures aiming to harmonize and simplify withholding tax system within the EU.
FPM strongly welcomes the proposals to broaden the scope of the Interest and Royalties Directive and the Parent-Subsidiary Directive, notably by removing minimum holding requirements. These amendments would reduce the circumstances in which withholding taxes apply within the internal market. Indeed, withholding taxes remain a significant obstacle to the free movement of capital and the development of the Savings and Investments Union (SIU): they generate direct costs, administrative burdens and cash-flow constraints, while complex and lengthy refund procedures may discourage cross-border investment.
The removal of withholding taxes on intra-EU payments must therefore remain the main objective of the tax omnibus.
We have two final remarks :
- the proposed implementation timeline for the PSD and IRD changes is too long (the key WHT measures would apply only after eight years). A materially shorter transition period is needed so that the competitiveness and simplification benefits can be realised sooner ; at least, these changes should be effective on January 2030, in coordination with the beginning of FASTER
- where withholding taxes continues to be applied, simplification and harmonization of refund procedures must be effective. However, based on FASTER, which opens lots of options (around 30) for Member States, this is not the case. Consequently, Tax Omnibus Directive must engage a decluttering exercise of due diligence, reporting and obligations provided by FASTER