Recital (6)

To ensure a proportionate approach, this Directive should cover procedures to relieve excess withholding taxes only in those Member States that levy withholding tax on cash or stock dividends at different rates depending on the specific investor’s tax residence. In such cases, Member States need to provide relief where a higher rate of tax has been applied in a situation for which a lower rate is applicable. Member States should also have the opportunity to implement similar procedures in relation to interest payments to non-residents on publicly traded bonds, to improve the efficiency of the relevant relief procedure and to ensure a higher level of taxpayers’ compliance. Member States that do not need relief procedures in relation to excess withholding taxes on dividends and interest, as the case may be, are not concerned by the procedures referred to in this Directive. Where relief of excess withholding taxes is needed and to ensure a common access to relief of excess withholding taxes, this Directive should provide for a common relief-at-source system and a quick refund system to be implemented by Member States.