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In order to create a true single market for investments, the main obstacle (taxation) for “retail” investors must be addressed through EU action and standardised mechanisms.
Tax refund procedures are far too complicated and often too costly to enable the average, non-professional investor to obtain refunds on withholding tax. The most important obstacles to this are the delays in effectively receiving the excessive WHT refund, the high compliance costs associated with the WHT refund procedures, and the high opportunity costs due to the delay in receiving the WHT refunds, which ultimately lead to permanent factual double taxation suffered.
Without a doubt, the need for reform has gone beyond a mere “tax cooperation” between EU Member States and action needs to be taken in a harmonised manner at the EU level. The EU co-legislators must mandate the EU Commission to propose a "relief at source" system through an EU Regulation and significantly improve all other adjacent aspects in order to stimulate cross-border “retail” investments. The range of measures must simplify procedures and (only partially) avoid EU “retail” investors being taxed twice – which is not a favour to them, but their right – and invest on a cross-border basis, otherwise the Capital Markets Union will remain a utopic desiderate.