The Electronic Tax Residence Certificate (eTRC) under the FASTER Directive: A Major Step towards EU Digital Tax Administration

The FASTER Directive represents a pivotal step towards the digitalization and harmonization of withholding tax relief across the European Union. At its core lies the standardized, machine-readable electronic Tax Residence Certificate (eTRC), which replaces the previously unharmonized paper-based national certificates of residency of the EU Member States. The introduction of the eTRC addresses key challenges such as system fragmentation, legal uncertainties and operational inefficiencies. At the same time, it sets high standards for technical implementation, interoperability, data protection and national rollout. Through the eTRC, the FASTER Directive thus lays the foundation for an EU-wide, digitalized and automated withholding tax relief process – and could serve as a blueprint for future global standards.