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The European Commission’s Fiscal Compliance expert group (FISCO) issued a report setting out solutions to fiscal compliance barriers related to clearing and settlement of cross-border securities transactions. The report puts forward concrete proposals for improving and speeding up the way these transactions are settled.
The FISCO Report concludes that the present withholding tax relief procedures are costly and inefficient. The report proposes an EU Tax Relief Procedure to facilitate the clearing and settlement of securities within the Member States by simplifying and harmonising the tax relief procedures.
ON transaction tax procedures FISCO concludes that any regime requiring transaction tax
to be collected by settlement service providers will constitute a significant obstacle, dissuading or preventing foreign Central Securities Depositaries (CSDs) from accepting securities subject to such transaction tax. The only logical recommendation which can ultimately be made to address this would be not to impose the tax-collection responsibilities on local settlement service providers.