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Belgium's Reynders Eyes Swiss Tax Deal

by Ulrika Lomas,, Brussels

11 September 2012

Belgium is currently considering the idea of concluding a bilateral withholding tax accord or so-called ‘Rubik’ agreement with Switzerland, according to Belgian Foreign Minister Didier Reynders.

Based on the German model, the agreement would serve to regularize undisclosed accounts by means of a withholding tax imposed on the undeclared and untaxed wealth of Belgian residents located in Swiss banks, and to ensure that future deposits are subject to taxation.

The minister’s announcement followed a working visit to Switzerland at the beginning of the month, during which he held talks in Bern with President of the Confederation Eveline Widmer-Schlumpf. The discussions focussed on a possible savings tax agreement.

The Belgian Foreign Minister nevertheless underscored that in order for Belgium to proceed with the treaty, the provisions could only be a transitional measure. In the long-term, an automatic exchange of tax information must replace the withholding tax agreement, Reynders insisted.

Reynders has estimated the wealth of Belgian citizens held in Swiss bank accounts at between EUR30bn (USD34.4bn) and EUR40bn. A tax of over 30% would generate around EUR10bn for the Belgian tax authorities, the minister said. A withholding tax of 25% is envisaged for future investments.

In Germany, the bilateral tax agreement with Switzerland remains in the balance. The red-green led federal states are determined to veto the treaty in the Bundesrat, or upper house of parliament, where the black-yellow coalition no longer has a majority.

TAGS: tax | investment | Belgium | banking | offshore | offshore banking | banking secrecy | withholding tax | Switzerland

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