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EU, Switzerland Sign Tax Transparency Deal

by Ulrika Lomas,, Brussels

28 May 2015

The European Union (EU) and Switzerland will automatically exchange information on the financial accounts of each other's residents from 2018, under a new tax transparency agreement signed on May 27, 2015.

The agreement was signed by EU Tax Commissioner Pierre Moscovici, Latvian Finance Minister Janis Reirs (on behalf of the Latvian Presidency of the EU Council), and Jacques de Watteveille, the Swiss Secretary for International Finance Matters. It will replace the EU-Switzerland taxation of savings agreement that has been in force since 2005. It includes the existing withholding tax exemption for cross-border payments of dividends, interest, and royalties between related entities.

Under the deal, the parties will receive, on an annual basis, the names, addresses, tax identification numbers, and dates of birth of their residents with accounts in contracting states, along with other financial and account balance information.

The agreement is expected to enter into force on January 1, 2017. Switzerland and the 28 EU member states intend to collect account data from 2017.

Moscovici said: "Today's agreement heralds a new era of tax transparency and cooperation between the EU and Switzerland. It is another blow against tax evaders, and another leap towards fairer taxation in Europe. The EU led the way on the automatic exchange of information in the hope that our international partners would follow. This agreement is proof of what EU ambition and determination can achieve."

A consultation launched by the Swiss Federal Council is open for comment until September 17, 2015. The agreement will then be submitted, together with a dispatch, to the Swiss Parliament for approval. In the coming weeks, the Federal Council will adopt dispatches on the Automatic Exchange of Information Act, the Multilateral Competent Authority Agreement, and the Organisation for Economic Cooperation and Development/Council of Europe administrative assistance convention. The European Commission is concluding negotiations for new tax transparency agreements with Andorra, Liechtenstein, Monaco, and San Marino.

TAGS: tax | tax avoidance | interest | royalties | banking | financial services | Latvia | Liechtenstein | Monaco | agreements | withholding tax | Switzerland | dividends | European Union (EU) | Andorra | San Marino | services | Europe | Tax | Tax Evasion

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