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Austria Reaps Early Benefits Of Swiss Tax Accord

by Ulrika Lomas, Tax-News.com, Brussels

16 November 2012


Austria’s bilateral tax agreement with Switzerland has already borne fruit, even before it enters into force at the beginning of 2013, with the finance ministry reporting a spike in voluntary declarations.

Based on the tax treaties concluded between Switzerland and the UK and Switzerland and Germany, the Swiss-Austrian tax deal signed in April provides similarly for a withholding tax levied on undisclosed assets held by Austrian residents in Swiss banks to regularize the accounts. The agreement also contains plans to impose an annual withholding tax on future investment income.

According to the Austrian finance ministry, 210 voluntary declarations have been submitted this year to the country’s tax authorities from Austrians with undeclared accounts held in Switzerland. These voluntary declarations are expected to lead to additional tax revenues totalling around EUR59.3m (USD75.5m).

Overall, Austria has set a revenue target for this so-called “black money tax” of approximately EUR1bn. The aim is that the full effects of the tax treaty, due to take effect on January 1, 2013, will be seen in 2013.

Since 2008, 433 voluntary declarations have been submitted from Austrians with undeclared Swiss bank accounts, compared with just 124 declarations from Austrians with accounts held in Liechtenstein, the finance ministry reported.

Determined to ensure that all of Austria’s double taxation agreement (DTA) network is in accordance with the Organization for Economic Cooperation and Development’s (OECD) Model Convention, the Austrian government has revised 21 DTAs since 2009, to include provision for the OECD’s internationally-agreed standard, including with the Netherlands, Switzerland and Singapore.

Austria has concluded nine new DTAs and negotiated tax information exchange agreements with Monaco, Andorra, Gibraltar and Saint Vincent and the Grenadines.

The existing DTA with Liechtenstein is also due to be revised to ensure compliance with the OECD standard.

TAGS: compliance | tax | investment | tax information exchange agreement (TIEA) | double tax agreement (DTA) | banking | Organisation for Economic Co-operation and Development (OECD) | offshore | agreements | offshore banking | banking secrecy | withholding tax | Austria | Switzerland

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