Switzerland Reveals EU Savings Tax Directive Revenues

by Ulrika Lomas, Tax-News.com, Brussels

25 April 2007

The Swiss government's Federal Department of Finance has released figures showing the amount of tax withheld from the savings of individuals resident in EU member states under the much-maligned EU Savings Tax Directive regime.

The gross revenue generated from the imposition of Switzerland’s system of tax retention on interest payments in Switzerland, on earnings liable to tax in the EU for the 2006 tax year, amounts to CHF536.7 million (EUR327 million). For the second half of 2005 the amount collected was CHF159.4 million.

Overall in 2006, approximately 55,000 declarations were received (35,376 declarations were received for the second half of 2005).

On 31 March, the payment deadline expired for EU tax retained from individuals resident in EU member states on interest payments made by Swiss paying agents during the course of 2006.

The agreement on the taxation of savings income with the European Community in force since 1 July 2005 makes provision for 75% of the proceeds to be passed on to the member states concerned. 25% goes to the Confederation, of which 10% is passed on to the cantons. This meant that CHF402.54 million was passed on to EU member states, while Switzerland's share amounted to CHF134.18 million.

The figures show that by far the largest sums were remitted to Germany (CHF103.4 million) and Italy (CHF103 million).

In addition, the agreement on the taxation of savings income makes provision for the recipients of interest payments to choose between the system of tax retention and a voluntary declaration to the tax authorities. The precise results of the voluntary declarations in the 2006 collection period are not yet available. These will be published at a later date on the website of the Federal Tax Administration.

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