Aziz Rahman assesses European Union’s approach to withholding tax

Aziz Rahman was asked by Law360 for his thoughts about the possibility of changes being made to the European Union's system of granting relief for withholding tax.

Aziz emphasised the fact that changes are being proposed at a time when Europe is trying to manage the after-effects of the controversial share-selling practice Cum-Ex. Any changes must ensure that the system cannot be exploited.

With Cum-Ex, a company’s shares are sold or swapped just before a dividend pay-out, with claims then made for refunds of taxes that were never paid. A number of countries are now trying to recoup huge amounts of money they paid out in withholding tax rebates due to Cum-Ex.

Aziz explained that the shockwaves that Cum-Ex created across Europe may continue to have an effect for some time.

This has led some to believe that preventing fraud may be higher on European governments' agendas than co-ordinating an approach on withholding tax.

The Law360 article can be read here. (Subscription required)