Switzerland has agreed to automatically exchange information with the EU, bringing an end to banking secrecy.
A new tax transparency agreement was signed on 27th May 2015 by Jacques de Watteveille, the Swiss Secretary for International Finance Matters, EU Tax Commissioner Pierre Moscovici and Latvian Finance Minister Janis Reirs (on behalf of the Latvian Presidency of the EU Council).
The accord still needs to be ratified by the Swiss parliament, but is expected to enter into force on 1st January 2017. Switzerland and the EU will start collecting data on each other’s taxpayers in 2017, so that they can make the first information exchange in 2018. It will then be repeated annually.
This new agreement will replace the current EU-Switzerland taxation of savings agreement under the EU Savings Tax Directive. It includes the existing withholding tax exemption for cross-border payments of dividends, interest and royalties between related entities. The information to be exchanged includes the account holder’s name, address, tax identification number, date of birth and bank balance.
The EU is negotiating similar agreements with Andorra, Liechtenstein, Monaco and San Marino.
The EU believes that its member states lose around €1 trillion of revenue to tax evasion each year.
When the new deal was signed with Switzerland, Mr Moscovici said: “Today's agreement heralds a new era of tax transparency and cooperation between the EU and Switzerland. It is another blow against tax evaders, and another leap towards fairer taxation in Europe. The EU led the way on the automatic exchange of information in the hope that our international partners would follow. This agreement is proof of what EU ambition and determination can achieve.”
He explained that it will improve governments’ ability to track down tax evaders, and will also act as a deterrent against hiding income and assets abroad to evade taxes.
Switzerland has also signed up to the Organisation for Economic Co-operation and Development’s (OECD) Common Reporting Standard that provides for automatic exchange of tax information on a global basis. The first data exchange under this new Standard will take place in 2017, though Switzerland, along with some other countries, will start in 2018.
The world of international tax planning has changed considerably over recent years. It is important to take professional advice to ensure your tax planning is both effective and compliant with the tax regime here in Portugal, as well as anywhere else that affect you.
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