The commencement dates for some of the derogations granted
in respect of the EU Directive on Interest and Royalties
are linked to the start date for the EU Savings Tax Directive
(1 July 2005). Under these provisions, derogations for payments
of interest and/or royalties for periods ranging from 2
to 8 years were granted to a number of countries that joined
the EU in May 2004, as well as to Spain, Portugal and Greece.
The timetable for reductions in withholding tax rates on
interest and royalties for certain EU Member States is provided
in Table 1.
Table 1: Revised
timetable for reductions in withholding tax rates on interest
and royalties (certain EU Member States)
Revised
effective date
Country
Applicable to
Existing treaty/
domestic withholding rate
Directive withholding rate
1 Jan 2004
Belgium
Interest
15%
0%
Italy
Interest
10%
0%
Austria
Royalties (>50% licensee share capital)
10%
0%
1 May 2004
Estonia
Interest and royalties
10%
0%
Slovenia
Interest and royalties
5%
0%
Cyprus
Royalties (films)
5%
0%
1 July 2005
Portugal
Interest
15%
10%
1 May 2006
Slovakia
Royalties (certain copyrights, e.g. films)
10%
0%
1 July 2009
Lithuania
Interest
10%
5%
Latvia
Poland
Interest and royalties
10%
5%
Portugal*
Interest and royalties
10%
5%
1 Jan 2011
Bulgaria**
Royalties
10%
5%
Romania**
Interest and royalties
3%
0%
1 July 2011
Lithuania*
Interest
5%
0%
CzechRepublic
Spain
Royalties
10%
0%
Lithuania
Royalties
5% – 10%
0%
1 July 2013
Portugal*
Greece
Poland*
Latvia*
Interest and royalties
5%
0%
1 Jan 2015
Bulgaria**
Interest and Royalties
5%
0%
* For these
countries the ‘existing rate’ is the rate under the
amended Interest and Royalties Directive at that time
** Assuming that Bulgaria and Romania
join the EU on 1 January 2007
The
data in the table only cover payments between associated
companies from those EU Member States for which the
Directive will have a beneficial impact on withholding
tax rates.
'...derogations for
payments of interest and/or royalties for periods
ranging from 2 to 8 years were granted to a number
of countries that joined the EU in May 2004, as
well as to Spain, Portugal and Greece.'
