EU Raises Rates For Withholding Tax At Source
Starting July 2008, a new 20 percent tax rate comes in effect for withholding at the source taxes charged in several countries, according to the EU Savings Tax Directive. The EU Savings Tax Directive was adopted in 2005 to ensure the proper operation of internal markets and tackle the problem of tax evasion. It includes provisions for taxation at source and/or exchange of tax-related data between banks and tax authorities of member states.
In view of the large-scale investigation of money transfers to bank accounts in Liechtenstein to evade tax obligations by citizens of EU countries, Lazlo Kovacs, the European commissioner in charge of taxation issues, recently announced that the Directive stands in need of revision. According to him, EU countries agree that the current method of withholding tax at source cannot substitute for an exchange of tax-related data.
After the adoption of the Tax Directive in 2005, the tax-at-source deduction rate was set at 15 per cent. In July 2011 it will be increased to 35 per cent.
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| ||Source: Fortnostress Holdings|| |