The European Commission has commenced a consultation to look into the withholding tax problems faced by portfolio and individual investors on crossborder dividend payments.

The consultation is aimed at stakeholders, including individuals and corporates, experienced in cross-border dividend tax issues with the objective of exploring possible solutions to the problems caused by the levying and crediting of withholding taxes on cross-border dividend payments, which can be discriminatory and may lead to double taxation.  

Views are sought by the Commission on proposed solutions including:  

  • Abolition of withholding taxes on cross-border dividend payments to portfolio/individual investors  
  • The residence State grants full credit for the withholding taxes levied in the source State  
  • Net rather than gross taxation in the source Member State  
  • Limitation of both source and residence taxation of dividend income  

The consultation period closes on 30 April 2011 and contributions may be submitted via the Commission's website: