Taxation of savings income agreement enters into force
Bern, 24.6.2005 - The agreement on the taxation of savings income between Switzerland and the EU will enter into force on schedule on 1 July. The core of the agreement is Switzerland’s willingness to introduce a system of tax retention on interest payments to persons liable to tax in the EU. An alternative to the system of tax retention is the possibility of voluntary declaration of interest payments to the country of residence of the interest payment recipient. On the one hand Switzerland is thus ensuring that the directive on the taxation of savings income cannot be circumvented via Switzerland. On the other, fiscal banking secrecy concerning income tax which is anchored in the Swiss legal system is upheld. The agreement forms part of the second series of bilateral agreements which was signed in Luxembourg on 26 October 2004 and approved by parliament in the 2004 winter session. The definitive publication of the corresponding directives will occur on 28 June 2005 in the Official Compilation of federal legislation.