Swiss transfer withheld taxes to EU

29th May 2009, Comments 0 comments

Switzerland returns CHF 553.8 million to the European Union in taxes charged on account holders’ savings.

Geneva -- Switzerland said Thursday it returned CHF 553.8 million (USD 508.5 million, EUR 366.5 million) to the European Union in taxes charged on the savings of EU account holders in 2008.

Under an accord with the EU implemented on 1 July 2005, Switzerland automatically charges a withholding tax on the interest earned by EU taxpayers who have savings accounts in Swiss banks.

Three-quarters of the total amount levied – CHF 738.4 million in 2008 -- is returned every year to the EU country of the depositor.

The total sum returned to the European Union countries grew by an average of 15 percent annually for the first three years of the agreement, according to the Swiss finance ministry.

"Since 1 July 2008, the rate (of growth) has reached 20 percent," the ministry added in a statement.

Italy received most of the returned taxes in 2008 with CHF 142.7 million, while Germany was second with CHF 136.7 million.

France received the next biggest amount, CHF 72.3 million.

The withholding tax structure was adopted to get around tight banking secrecy regulations of certain countries within the EU, such as Luxembourg and Austria, as well as Switzerland.

The system allows taxes on the earnings from deposits held abroad to be returned to the taxpayer's country of origin and is meant to discourage tax evasion.

Switzerland said that it would ease strict banking secrecy rules and is negotiating with individual countries to share information to stop tax cheats.

AFP / Expatica

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