Switzerland and the UK sign tax agreement

Berne, 06.10.2011 - Today in London, Federal Councillor Eveline Widmer-Schlumpf and the UK Exchequer Secretary to the Treasury David Gauke signed a tax agreement. Under this agreement, persons resident in the United Kingdom can retrospectively tax their existing banking relationships in Switzerland either by making a one-off tax payment or by disclosing their accounts. Future investment income and capital gains of British bank clients in Switzerland will be subject to a final withholding tax, and the proceeds of this will be transferred to the British authorities by Switzerland. In addition, mutual market access for financial services will be improved. The agreement requires the approval of parliament in both countries, and should enter into force at the start of 2013.

The agreement represents a good result for the two countries, as it satisfies the interests and requirements of both countries equally well. The tax agreement signed by Switzerland and the United Kingdom of Great Britain and Northern Ireland respects the protection of bank clients' privacy applicable in Switzerland and also ensures the implementation of the British authorities' legitimate tax claims. In addition, mutual market access for financial services will be improved.

The tax agreement between Switzerland and the United Kingdom is largely the same as the agreement with Germany that was signed on 21 September 2011. For example, the tax rates for the regularisation of the past are identical. The differences are due primarily to the different tax systems, and concern in particular the tax rates for future income and procedural arrangements.

Both sides acknowledge that the agreed system will have a long-term impact that is equivalent to the automatic exchange of information in the area of capital income.

The agreement requires the approval of parliament in both countries, and should enter into force at the start of 2013.

Upon signing by both finance ministers, the complete text of the agreement will also be published.

With both agreements with the United Kingdom and Germany, Switzerland underscores its new financial market policy, which consistently focuses on the management of tax-compliant assets. This creates legal certainty and should strengthen the competitiveness and the reputation of Switzerland as a financial centre in the long term.

Address for enquiries

Mario Tuor, Communications, State Secretariat for International Financial Matters (SIF), tel. +41 (0)31 322 46 16