Withholding tax agreements with the United Kingdom and Austria enter into force
Bern, 31.12.2012 - On 1 January 2013, the withholding tax agreements between Switzerland and the United Kingdom and Austria enter into force. All British and Austrian taxpayers with a bank account or securities deposit in Switzerland are affected. The agreements solve the problem of untaxed funds. Clients either pay a withholding tax, which is deducted directly from their account and transferred anonymously to their country of domicile, or they must disclose their account details.
Banks must inform their affected clients about the new regulation by the end of February 2013. Clients will have until the end of May at the latest to announce whether the withholding tax is to be deducted from their account or whether they wish to disclose their account details. Already in the course of January 2013, the United Kingdom will receive an upfront payment of CHF 500 million from the banks in accordance with the terms of the agreement. This sum will be reimbursed to the banks in stages with anonymous retrospective taxation payments received from mid-year. No such upfront payment was agreed with Austria.
The actual implementation of the tax agreements will be governed by the Federal Act on International Withholding Tax (IWTA), which was brought into force by the Federal Council on 20 December 2012. The IWTA contains provisions on organisation, procedure, judicial channels, criminal law provisions and domestic procedural rules for the upfront payment.
Negotiations on similar agreements are under way with Greece and Italy. Other countries both within and outside Europe have also shown an interest. The signed agreement with Germany was not ratified by the German parliament in December 2012. The withholding tax model is part of the Federal Council's new financial market policy, the aim of which is to ensure that no untaxed foreign funds can be hidden in Switzerland.Address for enquiries
Mario Tuor, Communications, State Secretariat for International Financial Matters SIF, +41 31 322 46 16, mario.tuor@sif.admin.ch
Publisher
Federal Department of Finance
https://www.efd.admin.ch/efd/en/home.html