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EU FASTER Directive

Understand the impact and challenges of EU FASTER Directive, and how Xceptor helps firms simplify and expedite withholding tax relief for cross-border investment

What is EU FASTER?   

The EU FASTER Directive (Faster and Safer Tax Relief of Excess Withholding Taxes) is a European Council directive that was commissioned to simplify and expedite withholding tax (WHT) relief for cross-border investments across the EU.  

The new rules aim to make withholding tax procedures in the EU more efficient and secure for investors, financial intermediaries and national tax administrations.  

FASTER Directive will be mandatory for EU markets that hold at least 1.5% market capitalisation for 4 or more years.  This therefore applies to the EU’s largest markets. 

Why is the EU FASTER Directive being implemented?  

Reclaiming excess withholding tax (WHT) in the EU has traditionally been a slow, paper-heavy process. Those seeking tax Relief at Source (RAS) in available markets face fragmented procedures and variations in the types of documents required. This has led to a situation, where tax relief is a complicated and risky business for financial intermediaries, investors are not being made good, and tax authorities are seeking access to more information to supplement audits.  

The EU FASTER Directive seeks to change this by introducing a unified, digital-first framework, overhauling cross-border WHT processes across the EU and addressing long-standing inefficiencies in relief systems. 

 

The Directive aims to introduce a more streamlined and secure system that will:

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    Encourage the application of more cross-border tax relief to investors, where it is due.
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    Combat tax fraud, giving tax authorities the information they require earlier.
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    Standardise digital documentation, reporting, and tax relief workflows to ensure broad adoption.

When is EU FASTER being implemented?  

In-scope EU member states are required to transpose the Directive into national law by 31 December 2028, with the option to implement it ahead of the 2030 deadline.  

Full implementation is due by January 1, 2030.  

What are key deliverables of the EU FASTER Directive?

The EU FASTER directive is set to transform WHT relief across Europe, streamlining processes and reducing inefficiencies. Key elements include: 

Digital Tax Residence Certificate (eTRC)

Digital Tax Residence Certificate (eTRC)

Issued electronically within 14 days and accepted EU-wide. Initial plans to adopt a wallet/token-based solution to e-TRC look like they are taking a backseat for now. This does potentially allow for tax certificates issued by non-member states to be included in FASTER mechanics. . 

Fast-track procedures

Fast-track procedures

EU member states that are in scope will apply tax relief via:  
  • Relief at Source (RAS): Apply correct WHT at payment “at source”.
  • Quick refund: Excess WHT refunded within 50-60 days. 

Certified Financial Intermediaries (CFIs)

Certified Financial Intermediaries (CFIs)

Mandatory for large intermediaries; optional for smaller or non-EU firms.

Enhanced reporting obligations

Enhanced reporting obligations

To prevent tax abuse, intermediaries will face stricter reporting duties and prove that investors are entitled to tax relief.

FASTER is an opportunity for financial institutions to turn complex tax procedures into a competitive advantage. Learn how Xceptor can help you prepare for new regulation and offer tax relief services that generate revenue and drive customer loyalty.

Talk to our experts

What does FASTER apply to? 

The EU FASTER Directive applies to cross-border investors who receive dividends and interest from publicly traded shares and bonds within the EU.  

Applicable to:

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    Dividends on publicly traded shares where the paying entity is tax resident in an EU member state and the investor is non-resident
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    Interest on publicly traded bonds (at member state discretion)

Exclusions:  

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    Private placements
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    Non-listed securities
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    Domestic payments  
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    Member states with comprehensive relief-at-source systems and low market capitalisation (<1.5% of EU total) may be exempt. 

Who does EU FASTER affect? 

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.  

  • Cross-border investors: Includes individuals, pension schemes, and collective investment funds.  
  • Financial intermediaries: Large custodian banks and other financial institutions that handle dividend and interest payments as they now face new registration, reporting, and due diligence obligations to become CFIs. 
  • Tax Authorities: Member states must adapt their systems to accommodate the new digital certificate, reporting standards, and monitor compliance. 
  • Asset managers: Streamlined collection and processing of eTRCs. Operational adjustments for fast-track processes.  
  • Fund administrators: Required to modernise systems and strengthen oversight fort their tax-related services.  

The FASTER framework is reshaping cross-border tax relief, and preparation starts now. To stay ahead: 

  • Automate compliance workflows: For eTRC management, reporting, and fast-track processing. 
  • Upgrade systems: To handle real-time data exchange and due diligence checks.
  • Engage early with CFIs: Ensure registration and readiness for 2030 application deadline. 
  • Plan for operational impact: Especially for cross-border dividend and interest payments 

Let’s talk about your FASTER strategy

Xceptor can help you achieve all of this. Our data automation platform streamlines tax processes, integrates with your existing systems, and ensures compliance at scale, so you’re ready for EU FASTER without disrupting operations. 

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