The so-called European Union withholding tax is 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 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).
Read more about European Union Withholding Tax: Creation, Objective of The EU Savings Directive, Maintenance of Bank Secrecy Laws and The EU Withholding Tax, Countries Affected, Income On Which The EU Tax Is Deducted, Anti-avoidance, Income Gains and Profits Which Are Not Taxed, Individuals and Accounts Which Are Not Affected, Companies, UK Resident But Not UK Domiciled Individuals, Beckham Law, The Transitory Provisions of The Withholding Tax, Countries Providing For The Exchange of Information, Countries Providing For Tax Withholding Under The Transitory Provisions, Countries and Territories of E.U. Members Who Did Not Sign Any Agreement
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“When it comes to finances, remember that there are no withholding taxes on the wages of sin.”
—Mae West (1892–1980)
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