EU tax deal leaves Swiss vulnerable over banking secrecy
Switzerland is to face increased pressure to loosen its banking secrecy laws, following an agreement by European Union members to reveal details of assets belonging to residents of other member states.
The EU agreement, reached in Brussels on Monday, will compel member states to share information on non-residents’ savings income so it can be taxed in their country of origin.
The deal will increase the pressure on Switzerland to lift banking secrecy because it is conditional on other financial centres applying the same rules.
Until now Switzerland has been able to avoid confronting the issue head-on because of the refusal of EU member states, Luxembourg and Austria, to go along with any loosening of banking secrecy.
The Swiss government has already said it will not compromise its banking secrecy laws. However, many analysts say it will eventually have to comply with the EU rules if is to win concessions on trade and other issues.
A spokesman for the Swiss Bankers Association, James Nason, said the Swiss government has some breathing space because Austria, Luxembourg and Belgium have won a concession to delay the information sharing agreement for seven years.
During that time, they must impose a withholding tax at a rate of 15 per cent for three years, increasing to 20 per cent after that.
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