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UK, Swiss terminate savings tax deal for automatic info exchange

UK, Swiss terminate savings tax deal for automatic info exchange

BASEL: The UK and Switzerland have terminated tax arrangements under the Savings Tax Directive and will instead share information in tax matters automatically under the Common Reporting Standard.

The UK Government said, under the switch to the OECD’s Common Reporting Standard, UK taxpayers will no longer be able to pay a withholding tax to stop their information being shared with HM Revenue and Customs.

Under the UK-Swiss Confederation Taxation Co-operation Agreement, agreed in 2011 and implemented from 2013, UK residents with Swiss bank accounts were required to either permit the disclosure of bank details to HMRC or pay a substantial withholding tax to maintain their anonymity. This arrangement was negotiated on the basis of the EU Savings Tax Directive.

Although the UK Government at the time had been optimistic that the deal would bring in substantial revenues, the deal resulted in just a quarter of the anticipated revenue in its first fiscal year in operation. The Agreement has now been terminated.