Savings Tax Agreement between Switzerland and the EU

 
In the European Union (EU), since 1989, efforts to unify the tax recognition of interest income within their territory. To prevent taxpayers from EU countries, the Directive on financial assets at places outside the EU deal, the EU is interested in cooperation with certain third countries. This also includes Switzerland.
The taxation of savings income dossier is part of the second tranche of bilateral treaties between Switzerlandand the EU, on 26 October 2004 in Luxembourg by the EU and Switzerland were signed. These are the firstEntered into force in July 2005.
Accordingly, on all interest payments, the one situated on the territory of Switzerland paying agent - such as abank - provide a natural person resident for tax purposes in an EU member country, a tax of initially 15 percent,from July 2008, 20 percent from July 2011 35 per cent deducted. The proceeds of the tax retention to 75 percentof the EU or its Member States. The tax is analogous to the withholding tax deducted automatically from the bank and delivered periodically as a collective amount the federal government.
This is to ensure, in most cases, that the proposed EU regulation can not be circumvented by Switzerland andthe Swiss legal system and banking secrecy are safeguarded. In practice, the EU countries do not receive the expected amounts from the EU withholding tax, there are not many financial products under the withholding tax, such dividends.