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Switzerland Withholds EUR615m In 2012 In EU Interest Tax

by Ulrika Lomas, Tax-News.com, Brussels

19 June 2013


According to the Swiss Federal Department of Finance, gross revenue generated from the system of tax retention on interest payments made in Switzerland to European Union (EU) taxpayers, amounted to CHF615.4m (USD666.6m) for the 2012 tax year. This figure compares with the CHF506.5m withheld by the Confederation in 2011.

In compliance with the agreement between Switzerland and the EU on the taxation of savings, in force since July 1, 2005, a system of tax retention has applied. Since July 1, 2011, a withholding tax rate of 35 percent has been imposed. 75 percent of the proceeds of the tax are passed to the EU member states concerned, while 25 percent of the proceeds go to the Confederation. Of this sum, 10 percent is subsequently transferred to the Swiss cantons.

The payment deadline for the EU tax retained last year by Swiss financial institutes on interest payments to EU residents expired on March 31, 2013. Of the CHF615.4m collected, CHF461.6m will be transferred to EU member states. The key beneficiaries of these transfers are Germany (CHF143.8m), Italy (CHF81.7m), France (CHF71.4m), Spain (CHF46.7m), the UK (CHF24.8m), and Belgium (CHF18.5m). Switzerland’s share amounts to CHF153.8m, of which CHF138.5m will be transferred to the Confederation and CHF15.3m will be allocated to the cantons.

Switzerland’s accord with the EU makes provision for the recipients of interest payments to choose between the system of tax retention and a voluntary declaration to the tax authorities. Overall in 2012, approximately 61,000 declarations were received.

TAGS: compliance | Finance | tax | investment | Belgium | interest | tax rates | withholding tax | France | Germany | Italy | Spain | Switzerland | individual income tax | European Union (EU) | Europe

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