THE LONG FAREWELL TO BANKING SECRECY - 27.05.2015 EU AND SWITZERLAND SIGN AEI AGREEMENT IN BRUSSELS
This paradigm shift, albeit one announced well in advance, finally took place in Brussels this morning. On Wednesday morning the Swiss Secretary of State for International Financial Affairs and his EU counterparts signed a bilateral agreement governing the automatic exchange of information (AEI) concerning tax. It envisages that Switzerland and the 28 EU member-states will collect account details from 2017 and exchange them mutually as of 2018. This will implement the corresponding global AEI standards established by the OECD.
This agreement, which replaces the existing bilateral savings-tax agreement in force since 2005, results in the de facto end of Swiss banking secrecy. The AEI has been designed to ensure that signatory countries will also be able to apply their own national rules to assets held abroad by their taxpayers, in accordance with their place of residence. This will entail banks reporting the necessary financial information to their national authorities, who will then forward the data automatically to their opposite numbers in investors´ countries of origin. OECD standards establish that Switzerland will soon exchange with EU-member states the account number, name, address and date of birth of each bank customer, along with details of interest, dividends, account credit balances and income from the disposal of financial assets.
As with the chronicle of a death foretold, this agreement has a lengthy backstory. The long farewell to banking secrecy actually began almost ten years ago, on 1st July 2005, with the inclusion of Switzerland in the EU´s cross-border taxation of savings.
Foreign investors have therefore been well advised for some time to put their asset-related affairs in order. We are available to provide you with such advice, both in word and deed.