The European Securities and Markets Authority (ESMA), the financial markets regulator and supervisor for the European Union, has published the annual market capitalisation and market capitalisation ratios for all EU member states covering the 2024 and 2025 reference years.

This release represents the inaugural implementation of the authority’s mandate under the Faster Directive, which aims to standardise processes for withholding tax relief across the bloc.

Under this legislative framework, the regulator was tasked with developing specific technical standards regarding the calculation methodology for market size.

The figures serve a crucial purpose for investors and national authorities, as countries where the market size exceeds 1.5 per cent of the total EU market capitalisation for four consecutive years are subject to stringent requirements concerning withholding tax relief.

Withholding tax is a tax levied on income, such as dividends or interest, which is deducted at the source before the recipient receives the payment.

By providing these statistics, the authority aims to offer clarity on the position of each member state within this framework, allowing for the timely preparation and implementation of the new tax relief procedures.

The publication is designed to help both regulatory authorities and market participants navigate the complex rules associated with cross-border investments.

The regulator confirmed that it will continue to publish updated market capitalisation figures and ratios on an annual basis to ensure the data remains accurate and relevant for compliance purposes.