The European Commission has confirmed plans to refer Luxembourg's application of parts of the European Savings Directive to the European Court of Justice.

The EC is concerned about interest payments made to beneficial owners who benefit from non-domiciled residency status in their country of residence, according to tax-news.com

Luxembourg legislation currently allows paying agents to forgo levy withholding tax on interest payments to beneficial owners.

A statement released by the EC said: 'The commission is of the opinion that the paying agent has the obligation to establish the residence of the beneficial owner on the basis of minimum standards.

'If the beneficial owner is a resident of another member state in accordance with these standards, the member state of the paying agent must ensure that the latter applies the Directive and, in the case of Luxembourg, that the paying agent levies a withholding tax on interest payments to such a beneficial owner.'

Further Reading:

Non-doms ‘confused’ by taxman

Non-doms dissatisfied with changes to tax regime