The three agreements are based on the same four elements as the savings agreement between the EU and Switzerland which was signed on 26 October 2004. These are as follows:

Withholding Tax: Paying agents in the three countries will be required to withhold tax on interest payments to EU individuals at the same rates as Belgium, Luxembourg and Austria under the Savings Directive - 15% during the first three years, 20% for the subsequent three years and 35% thereafter. The three countries will share the revenue of the tax withheld, transferring 75 per cent of the revenue to the tax authorities of the individual's Member State of residence.

Voluntary disclosure of information: The retention tax will not be applied if the EU resident taxpayer authorises the paying agent to disclose information on the interest payment to his home tax authorities.

Review clause stating that the Contracting Parties shall consult with each other at least every three years or at the request of either Contracting Party with a view to examining and if necessary improving the technical functioning of the Agreement, taking into account international developments.

Exchange of information upon request: For income covered by the draft Agreement, the three countries will grant exchange of information on request for cases of fraud or comparable misbehaviour.

Laszlo Kovács, EU Commissioner for Taxation and Customs, commented: "I am delighted to welcome these agreements which show the willingness of each of our three European partners to work actively with us to tackle distortions in the capital market.”

He added: "While individuals' rights under the EC Treaty to place their capital wherever they choose must be protected, this cannot be allowed to lead to tax evasion and consequent erosion of Member States' tax revenues".