Swiss Unlikely To Implement Savings Tax Directive In 2005

by Ulrika Lomas, Tax-News.com, Brussels

21 April 2004

The Swiss President Joseph Deiss, indicated on Monday that Switzerland is prepared to fight on past the June 2004 deadline for concluding the European Savings Tax deal in order to win the concessions it requires to maintain banking confidentiality.

Such a development will mean that the European Union will find it difficult to implement its banking information sharing agreement as planned on January 1 2005. The EU also still has to win the cooperation of several other European jurisdictions, namely Andorra, Liechtenstein, Monaco and San Marino.

However, Mr Deiss stated earlier this week that the Swiss are not under the same time pressures as the EU concerning the implementation of the directive.

“We are not intending to do this on January 1 next year,” he was reported as saying.

“If the EU wants to do it, OK, we are ready, but we are not prepared to sign the interest taxation agreement before having all eight other documents too," the Swiss President added.

The Swiss are continuing to hold for out for deals on eight separate issues ranging from agricultural agreements to environmental matters. However, the key stumbling block remains the Schengen convention which has removed border controls between 13 EU member states, plus Norway and Iceland.

Whilst the Swiss have expressed a willingness to accept the Schengen agreement, the country’s leadership remains concerned that accompanying rules facilitating exchange of information on criminal intelligence may erode banking confidentiality.

A European Commission spokesman stated yesterday that the EU “remains confident” that a deal will be struck with all the ‘third countries’ by the June deadline.

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