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New Swiss-EU treaty will replace Savings Tax Agreement

Monday, 23 March, 2015

EU-Swiss agreement

Switzerland has signed an agreement to exchange bank account information automatically with the European Union within three years.

The agreement requires Switzerland and all 28 EU member states to collect account data from 2017 and exchange it from 2018. It will supersede the existing EU-Swiss Savings Taxation Treaty, which has been operating since 2005. That treaty's withholding tax exemption for cross-border payments of dividends, interest and royalties between related entities are being carried over into the new agreement.

The agreement is based on the Common Reporting Standard (CRS), the global protocol for automatic exchange announced by the OECD last year. Every year EU member states will receive the names, addresses, tax identification numbers and dates of birth of their residents with accounts in Switzerland, as well as a 'broad set of other financial and account balance information'. The Swiss authorities are entitled to receive the same information from EU governments.

European tax commissioner Pierre Moscovici said he was confident that the EU's 'other neighbours' (meaning Liechtenstein, Monaco, Andorra and San Marino) would soon follow suit.

According to the Swiss government, it is 'not possible to formally link other tax and financial issues' (by which it means regularisation of non-compliant bank accounts) with the onset of the new agreement.

However, it says, it has received assurances from the European Commission that EU member states will be encouraged to launch regularisation programmes before the automatic exchange of information is introduced, as Germany and Italy have already done.

The agreement also includes improved access for Swiss banks to EU markets, on which discussions are under way.

It will have to be submitted to the Swiss parliament for approval, and may also be put forward for referendum.

Sources