What is EU Faster

Understanding the future of cross-border tax Relief 

The European Union is introducing a landmark reform, the EU FASTER Directive – short for Faster and Safer Relief of Excess Withholding Taxes –designed to tackle inefficiencies in today’s fragmented system, reduce fraud, and improve investor experience. Here’s what you need to know. 

What is EU FASTER? 

EU FASTER is a directive that aims to harmonises and digitises withholding tax (WHT) relief processes for cross-border investments within the EU. Currently, investors face complex, paper-heavy procedures that vary by country, often leading to delays, high costs, and operational risk. EU FASTER Directive introduces: 

• Digital tax residence certificate (eTRC) valid across all EU member states.
• Standardised relief-at-source and quick refund procedures, replacing inconsistent national approaches. 
• Mandatory reporting and data exchange between tax authorities to combat fraud. 

• A framework for Certified Financial Intermediaries (CFIs) to manage relief and reporting. 

Why was the FASTER Directive introduced? 

This initiative is part of the EU’s broader Capital Markets Union strategy, aiming to make cross-border investment more efficient and secure.  

Historically, reclaiming excess WHT in the EU has been slow and inconsistent. Relief-at-Source (RAS) processes, where available, differ by market, creating risk for financial intermediaries and lengthy delays for investors in receiving their entitlements. Meanwhile, tax authorities are demanding greater transparency and access to information to strengthen audits and prevent fraud. 

The EU FASTER Directive aims to resolve these issues by introducing a unified, digital-first framework that standardises and accelerates cross-border WHT processes. Its objectives include: 

• Eliminate inefficiencies by replacing paper-heavy workflows with streamlined digital solutions 
• Digitising workflows to reduce administrative burden for investors and intermediaries. 
• Accelerating refund timelines, improving liquidity and investor confidence. 
• Enhancing transparency and security with real-time data sharing. 
• Strengthening fraud prevention by standardising processes and increasing oversight. 

When will EU FASTER be implemented? 

The FASTER Directive has already passed several key milestones. The Council reached agreement on the proposal in May 2024, and the directive was officially published in December 2024. Member states now have until 31 December 2028 to transpose the directive into national law, with full implementation expected by 1 January 2030.  

• Transposition deadline: 31 December 2028 
  All EU member states must incorporate the directive into their national legislation. 
• Full implementation expected: 1 January 2030 
  From this point, harmonised and digitalised WHT relief processes become mandatory across the EU.

While these dates may seem distant, the scale and complexity of the transition means preparation must start now. Firms will need to overhaul existing WHT processes, implement digital solutions, and ensure compliance with new reporting standards well ahead of the deadline to avoid operational disruption and regulatory risk. 

Who is affected? 

The EU FASTER Directive will have far-reaching implications across the entire financial and withholding tax relief ecosystem as every participant will need to adapt to new digital standards, reporting obligations, and changes in how cross-border tax processes are managed:  

• Financial institutions 
  Predominantly large EU-based custodians, which are required to register as Certified Financial Intermediaries (CFIs) and meet the directive’s operational and compliance standards. These institutions will need to implement new systems for digital tax relief, manage reporting obligations, and ensure robust due diligence processes. 
• Cross-border investors 
  Individuals, pension schemes, and collective investment funds that currently face lengthy and inconsistent withholding tax reclaim processes. Under the FASTER Directive, these investors will benefit from faster refunds and simplified procedures. 
• Financial intermediaries 
  Large custodian banks and other financial institutions handling dividend and interest payments will face new registration, reporting, and due diligence obligations to become CFIs. These changes will require significant investment in technology and process redesign to comply with the directive. 
• Tax authorities 
  Member states must adapt their systems to accommodate the new digital certificate, implement standardised reporting frameworks, and monitor compliance across intermediaries and investors. This will involve building secure data exchange platforms and ensuring interoperability across jurisdictions. 
• Asset managers 
  Firms will need to streamline the collection and processing of eTRCs and adjust operational workflows to support fast-track relief processes. This may involve integrating new technology solutions and collaborating closely with custodians and intermediaries. 
• Fund administrators 
  Administrators will be required to modernise their systems and strengthen oversight for tax-related services. This includes ensuring accurate data management, timely reporting, and compliance with the directive’s digital standards. 

How to prepare for FASTER Directive 

Preparation for EU FASTER is not optional. Financial institutions and intermediaries need to act now to avoid operational disruption and regulatory risk. Here are five key steps: 

• Assess your current processes 
  Map existing withholding tax workflows to identify manual bottlenecks, fragmented data sources, and areas that cannot scale under the new digital framework. 
• Prioritise data quality and accessibility 
  Ensure data is clean, standardised, and easily retrievable across systems. 
• Invest in automation and technology 
  Implement solutions that automate WHT relief workflows, validate data, and support real-time reporting. Platforms like Xceptor can help digitise and streamline these processes. 
• Engage with stakeholders early 
  Collaborate with custodians, asset managers, fund administrators, and tax authorities to align on timelines, standards, and interoperability requirements. 
• Plan for certification and compliance 
  Register as a CFI as early as possible to allow access to fast-track relief systems and ensure readiness for new reporting and due diligence obligations. 

The road to EU FASTER starts now 

The EU FASTER Directive marks a turning point for cross-border tax relief in Europe. By introducing a unified, digital-first framework, it promises faster refunds, greater transparency, and reduced operational risk for all stakeholders. But with implementation deadlines on the horizon, preparation is critical. Financial institutions, intermediaries, and asset managers must act now to modernise processes, strengthen data management, and ensure compliance. 

Ready to start planning? Explore our detailed guide on the five steps to prepare for EU FASTER and MiKaDiv, and discover how automation can help you stay ahead of regulatory change.