With the application of the provisions of the Council Directive 2003/48/EC and the agreements with the key third countries and the dependend and accociated territories from 1. July 2005, paying agents in several countries are obliged to levy withholding taxes on interest payments to beneficial owners who are individuals resident for tax purposes in another member state. The withholding tax levied by the State of the paying agent does not discharge the beneficial owner's tax liability in his member state of residence. The member state of residence remains fully entitled to tax the income recieved by the beneficial owner in accordance with its national laws but is however obliged to eliminate any double taxation which might result from the imposition of the withholding tax by the state of the paying agent. Lars Gläser takes a closer look at the provisions of the elimination of double taxation in the directive and the agreements with the key third countries with special regard to the enforcement of these provisions.