Еуроодақ мүше мемлекеттеріндегі табыс салығының ұсталу тәртібі

The European Union withholding tax is the common name for a withholding tax which is deducted from interest earned by European Union residents on their investments made in another member state, by the state in which the investment is held. The European Union itself has no taxation powers, so the name is strictly a misnomer. The aim of the tax is to ensure that citizens of one member state do not evade taxation by depositing funds outside the jurisdiction of residence and so distort the single market. The tax is withheld at source and passed on to the EU Country of residence. All but three member states disclose the recipient of the interest concerned. Most EU states already apply a withholding tax to savings and investment income earned by their nationals on deposits and investments in their own states. The Directive seeks to bring inter state income into the same arrangement, under the Single Market policy.

The tax was introduced at the time of the introduction of the European Union Savings Directive (EUSD), a directive on the taxation of interest income from savings within the European Union that came into effect on 1 July 2005.

The original aim of the EUSD was that all countries would freely disclose interest earned by a resident of an EU country in order to ensure that the interest was fully declared in his country of residence. The plan was that non EU countries would also agree to disclose information about the interest earned by EU residents. Many non EU states and countries agreed to introduce similar measures. These countries included most tax havens and dependent territories of the EU countries. Countries such as the Isle of Man, Jersey, Guernsey, Cayman Islands, Andorra, Turks & Caicos, British Virgin Islands, Monaco, Switzerland, and many others thus agreed to implement similar or transitional arrangements (see below). The transitional arrangements involved the payment of a withholding tax whilst bank secrecy remained protected.

Some countries agreed to fully comply with the EU Savings Directive by disclosing the names of their account holders and the interest that they earned. However, several other EU and non EU countries, such as Switzerland, objected to the disclosure of account holders' names on the grounds that such a disclosure would be contrary to their bank secrecy laws. Bank secrecy laws prevent the disclosure of information about account holders, their assets, and their interest or other income. Finally an agreement was struck with the objecting countries. The objecting countries achieved agreement from the EC that no further attempt would be made to commence negotiations regarding bank secrecy rules for at least 7 years, in return for which individual account holders could, if they so wished, voluntarily elect to waive bank secrecy and authorise disclosure. Those individuals who did not make any election would see a withholding tax deducted from their bank and bond interest. To avoid the withholding tax, certain types of individuals could also prove that they were exempt from taxation in their country of residence. Exempt individuals include certain diplomats and others with a special tax status in their country of residence. Accordingly, in order to guarantee privacy and bank secrecy for EU residents who have accounts within certain territories such as Switzerland, a withholding tax of 35% is being levied on the interest earned by those EU residents. This withholding tax, which applies only to certain interest income NOT considered as sourced in Switzerland, such as interest earned on fiduciary reposits, is passed on anonymously to the EU countries concerned, and is known informally as the EU Withholding Tax.

In the example below we use Greece as an example, but the same mechanism applies to any Member State. If a Greek beneficial owner has an ordinary bank account (i. e. not a fiduciary deposit) that produced interest income of e. g. EUR 500, he will be subject to 35% anticipatory tax in Switzerland under its domestic law (i. e. NOT under the EU CH Agreement), i. e. 500*0.35=175. Then, if the beneficial owner would like to use the reduced rate under GR CH double tax treaty (10%), he would have to file a refund claim to the Swiss tax authorities. That claim would have to be accompanied by a certificate of tax residence issued by the Greek tax authorities. When requesting this certificate, the beneficial owner is effectively signalling to the Greek tax authorities the fact that he has earned or will earn income from a foreign source. Once he has filed the refund claim to the Swiss authorities, the Greek beneficial owner will be entitled to a refund for the difference between the anticipatory tax (500*0.35=175) and the maximum tax under the double tax treaty (500*0.10=50), which is 175 50=125. So, the actual tax burden in Switzerland after the application of the refund procedure is EUR 50. Now if the Greek domestic tax on the inbound interest income is 10%, it would in principle be levied on a gross basis, i. e. the tax base would be the full amount of interest income received (EUR 500). The Greek tax liability would be 500*0.10=50. However, under Art. 22 of the GR CH Double tax treaty "Where a resident of Greece derives income which, in accordance with the provisions of this Convention may be taxed in Switzerland, Greece shall allow as a deduction from the tax on the income of that resident an amount equal to the income tax paid in Switzerland. Such deduction shall not, however, exceed that part of the Greek tax, as computed before the deduction is given, which is attributable to the income which may be taxed in Switzerland." The Greek beneficial owner would therefore be entitled to credit the EUR 50 levied in Switzerland against his tax liability in Greece, which is also EUR 50. Therefore, after the application of the credit, the Greek beneficial owner would not owe any Greek tax on that interest income.

The EU withholding tax applies only to bank interest, bond interest, and analogous income, such as income from bond funds, money market funds, loans, and mortgages.

Certain anti avoidance measures exist, for example, to levy the tax where interest has been converted to some form of capital gain. Typically this would apply where, for example, a zero coupon bond has been bought and sold at a profit, or where a bond fund, or a money market fund, does not pay out its interest and the fund is subsequently sold at a profit. The rules define how much of the fund's assets must be in bonds for it to be classified as "interest earning". Initial reports as to the amounts of funds raised by the withholding tax suggest that the anti avoidance measures have not been particularly effective.

The EU withholding tax is not levied on any other forms of income such as employment income, trading profits, commercial activities, royalties, annuities and similar income. Also, the EU withholding tax does not apply to dividends from shares, nor to capital gains and other profits realised on investments. All these types of income and profits are described as being "out of scope".

The EU withholding tax is levied only on individuals and not on companies, discretionary trusts, foundations, stiftungs, anstalts, investment funds, etc., except in very special circumstances, e. g. a "bare trust". The EU withholding tax is not deducted from individuals who reside outside the European Union. Thus, for example, a resident of Jersey or of Switzerland, would not pay the tax, even though these countries have signed the agreement with the EU. Neither Jersey nor Switzerland are in the European Union.

The EU withholding tax does not apply to interest paid to companies. A separate EU directive, the Interest and Royalties Directive, applies to interest (or royalties) paid by a company in one member state to an associated company in another member state. Such interest is exempt from withholding tax, although in many cases interest paid is in any event exempt from withholding tax under the terms of double tax treaties between member states.

In the UK such individuals have a special tax status which limits them to paying tax on income and gains from UK sources, and on foreign income and gains which are remitted to the UK. A similar status can be accorded to individuals in some other European countries (e. g. Belgium and the Netherlands), because they are only temporarily resident for the purpose of employment. Certain countries such as Jersey and Switzerland accept that these individuals may be exempt from tax on income earned and retained overseas, and are thus not subject to any retention. The exemption needs to be proven.

Spain has introduced a similar concept to the UK non domiciled rule above, known as the Beckham law. The law gained its nickname after the footballer David Beckham became one of the first foreigners to take advantage of it. However the law is aimed at all foreign workers (particularly the wealthier ones) living in Spain. Upon application and acceptance such individuals are only liable for Spanish taxes on their Spanish source income and assets. As with the UK non domiciled individuals, exemption from tax on foreign income must be proven to the financial institution to avoid the EU Savings Tax deduction.

as of 2018, all EU member states exchange information with each other, per EU Council directive 2014/107/EU. Prior to 2017, there were several exceptions for member countries. The most recent exception was Austria. Belgium decided to discontinue applying the transitional withholding tax in 2010 and exchange information afterwards. In Luxembourg, clients could choose between exchange of information and withholding tax retention until 2015. Gibraltar is deemed to be part of the UK for the purposes of the EU Savings Directive and thus will exchange information with other EU countries such as Spain and the UK. Residents of Gibraltar will either suffer withholding tax on interest arising overseas, or have that income reported to the UK who will pass it on to Gibraltar authorities. Among the third countries signatories there are also, Anguilla, Cayman Islands, Montserrat and Aruba who have agreed to exchanging information.

Singapore, Hong Kong, Bermuda and Barbados did not sign any agreement. Bermuda, a UK dependent territory was missed out by EU by accident.