The withholding tax on interest payments made in Switzerland for bank accounts belonging to European Union citizens amounted to SFr506 million ($529 million) in 2011, a 17 per cent increase over the previous year.This content was published on May 25, 2012 - 12:59
Twenty per cent tax was retained until July last year, when the rate was increased to 35 per cent. However, the result is still less than in 2009, when SFr534.8 million was collected.
Three-quarters of the proceeds were transferred to EU member states, with the rest going to the Swiss government and cantons. The tax has been levied since 2005 under a bilateral accord on the taxation of savings between the EU and Switzerland.
The Federal Tax Administration said on Friday that Germany received the biggest check with over SFr122 million, followed by Italy with nearly SFr66 million, France with SFr55 million and Spain with SFr35 million. The British treasurer had to get by with just SFr21 million.
The agreement allows the recipients of interest payments to choose between a withholding tax or to voluntarily disclosure of their assets to the tax authorities.
Last year, 47,000 declarations were made, compared with 38,000 in 2010 and 33,000 in 2009. Declarations peaked in 2007 with 63,000.
The interest income declared in 2010 was worth SFr736 million; figures for last year are not yet available.
EU member states have been increasingly dissatisfied with the accord as the global financial crisis has bitten into revenue.
Switzerland has come under increased pressure to hand over names of alleged tax cheats from countries such as Germany, France, Italy and Britain. The EU has also been demanding total transparency from Swiss banks.
The Swiss authorities have managed to stave off some of the pressure thanks to so-called Rubik accords.
The Rubik principle was devised by the Association of Foreign Banks in Switzerland. The project wants to separate income from wealth and hand over tax at source to third countries, while keeping the Swiss bank account holder’s anonymity.
It is hoped that guaranteed anonymity will encourage foreigners with assets managed in Swiss banks not to take them away.
So far, deals have been signed in recent months with Austria, Germany and Britain. Agreements with other EU member countries are planned despite pressure from Brussels to introduce an automatic exchange of banking data.
However, the accords are subject to approval by the parliaments of all countries.
In exchange for cloaking the identity of offshore account holders, the Rubik deal promises to pay compensation for past tax dodging and compel banks to apply a withholding tax on the future profits of client assets.
Select EU states’ withholding tax transfers
Sweden SFr5,522,551.43End of insertion
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